BC incomes dropping

Thanks to ‘exx’ for posting the link to this story – According to statscan the median income in BC has been steadily dropping despite the ‘boom’ we’re currently in.  Younger Canadians in general are now earning much less than their parents did and paying a greater percentage of their income for housing.

New census data this morning shows the median income for full time workers in BC is a little over $42,000 a year, which is a drop of over 3% since 2000 and it’s down 11% since 1980 when you take inflation into account.

That’s surprising given BC’s higher than average employment growth. Statistics Canada says young people seem to be having a harder time finding full-time work after getting out of school, and those who do tend to make lower wages.

So more people are at work, but they’re earning less money at a time when housing, energy and food costs are spiraling out of control. How is this going to all work out and what effect will it have on future real estate prices in Vancouver?

51 Responses to “BC incomes dropping”

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    frank Says:
    1

    .

    .

    Just when I'm getting all fired up against the Sun, the bloody topic changes.

    Tell'em how you feel:
    http://www.canada.com/share/soundoff

    or email

    depenner@png.canwest.com

    Like or Dislike: Thumb up 0 Thumb down 0

    Tony Danza Says:
    2

    What does this mean for RE prices? Vancouver median RE prices will be closer to zero than 1MM in the near future. The worst part will be the increase in divorces, suicides, depression and the degentrification of many neighbourhoods in our fair city… these are all on the rise in the biggest bubble cities down south. :(

    But hey, maybe our politicos and the upper crust will keep things going! Let's put a new roof on the stadium, build a couple hospitals! Let's see what else do we "need"… Meh.

    Like or Dislike: Thumb up 0 Thumb down 0

    Remember, what the Re pimps were saying- there would be no price corrections in the absense of high mortgage rates or high unemployment.

    "Alberta home prices sliding"

    In south Edmonton, a 1,263 square foot bungalow that would have gone for $390,000 last year now sells for $337,000 or a 14 per cent drop, according to a spring, national house-price survey released yesterday by Century 21 Canada.

    In Calgary, a two-storey, 1,850 square foot home that might have gone for $480,000 last year now sells for $420,000, or a 13 per cent decrease.

    http://www.thestar.com/Business/article/420148

    Does anybody know what CMHC forecast was for Alberta ?

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    bank rat Says:
    4

    Does anybody know what CMHC forecast was for Alberta ?

    Interesting question -A-, I found a posting from this Edmonton realtor who attended a CMHC housing forecast for Alberta in November 2007. Check the following quote:

    "Richard Corriveau, analyst from CMHC said and I quote, it's "absolutely ridiculous" based on economic fundamentals for the province that prices should fall in 2008. When Richard Goatcher – the CMHC analyst for Edmonton – got up he took a much softer approach, saying that the forecast for the Edmonton market was a 7-8% increase in 2008 "IF" some of the current inventory gets chewed down.

    I don't know what planet Richard the first is from but I'd love to bring him to do my weekly reports to some of my sellers. Sales volumes are clearly down as the buyers are looking at their options, and many are log jammed waiting for the sale of their place to trigger their purchase.

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    Anonymous Says:
    5

    Gee, let's see, another day of doomsday predictions from the "Vancouver Condo" blog. What nuggets of wisdom will they debate today! How many "bulls" will they skewer today with their sharp forked tongues!

    Grab a bag of Self-Loathing and pull up a chair to watch!!

    Like or Dislike: Thumb up 0 Thumb down 0

    bank rat Says:
    6

    Here's another gem result of rear-view mirror prognostication for the Alberta housing market:

    Scotiabank predicts hot Alberta real estate market

    Now how accurate do you expect the predictions of all those 'local experts' in Vancouver will turn out?

    Like or Dislike: Thumb up 0 Thumb down 0

    WORLDS GREATEST LOVE Says:
    7

    Why would you want a bag of self loathing? Does buying overpriced assets improve self-love?

    Nice to see some real solid debate from the bullish side though, thanks for coming out!

    Like or Dislike: Thumb up 0 Thumb down 0

    I think an infallible indicator of how dire things will get is the venomous bull posts.

    And what other marketing flops will follow after the pathetic botched debacle the despicable pimps at the Vancouver Sun pulled of last week.

    Like or Dislike: Thumb up 0 Thumb down 0

    Anonymous Says:
    9

    Please, you people aren't being negative enough! There are idiots out there STILL buying condos and making money from them! THIS HAS TO STOP! MORE NEGATIVITY! MORE DIRE PREDICTIONS! HURRY, BEFORE ANOTHER CONDO IS SOLD!

    Like or Dislike: Thumb up 0 Thumb down 0

    puhlaya Says:
    10

    Personally, I'm loving those venomous bull posts.

    If the bulls were too busy making money in RE, they sure wouldn't be posting here.

    Slow market…bulging inventory…too much free time on their hands I guess…my mistake.

    Like or Dislike: Thumb up 0 Thumb down 0

    Krrish2 Says:
    11

    Anonymous,

    to stop some one from buying is *IMPOSSIBLE* because buyers with increasing income can't stop smiling……….

    In 2005, there were 601,510 full-time workers raking in $100K-plus salaries — a 26 per cent jump over 2000.

    The jump was even more pronounced among the 206,160 full-time workers who earned $150,000-plus salaries. Their numbers were up nearly 30 per cent in 2005.

    A recent survey on vancouver condo shows that all *BATS* include sold out owners and first time bears are making more than the said 42k in the post "bc income droping"

    Like or Dislike: Thumb up 0 Thumb down 0

    Anonymous Says:
    12

    Looks like some folks in the US are hurting big time. Wonder if we'll see some similar stories of people in Vancouver having to sell things just to get by.

    http://www.cnn.com/2008/LIVING/personal/05/01/cas

    Selling family treasures to pay bills

    NEW YORK (AP) — The for-sale listings on the online hub Craigslist come with plaintive notices, like the one from the teenager in Georgia who said her mother lost her job and pleaded, "Please buy anything you can to help out."

    Or the seller in Milwaukee who wrote in one post of needing to pay bills — and put a diamond engagement ring up for bids to do it.

    Struggling with mounting debt and rising prices, faced with the toughest economic times since the early 1990s, Americans are selling prized possessions online and at flea markets at alarming rates.

    To meet higher gas, food and prescription drug bills, they are selling off grandmother's dishes and their own belongings. Some of the household purging has been extremely painful — families forced to part with heirlooms.

    http://www.cnn.com/2008/US/04/30/immigrant.worker

    Or immigrants struggling and unable to send money home:

    Immigrant worker: No more money to Mexico

    ANAHEIM, California (CNN) — As he fixes a broken sliding glass door at an apartment in Anaheim, California, Eduardo Gutierrez worries about his parents in Mexico.

    He can no longer afford to send the $200 to $300 a month he had been sending back home to support his ailing father.

    "I kind of feel bad that I can't help my parents," said Gutierrez, a legal immigrant who has worked in the United States for 20 years. "I try. But I can't these days, and it's a tough situation."

    Gutierrez said he earns $18.50 an hour as a glazier, installer and fixer of glass in all shapes and sizes.

    But with the U.S. economy sagging, his hours have shrunk — even as his gas and grocery bills have skyrocketed along with other expenses. He's struggling just to support his wife and three children.

    Bank of Mexico, Mexico's equivalent to the Federal Reserve, says stories like these are becoming more common. Deceleration in the U.S. construction industry resulted in $100 million less "remittances" — money from workers in the U.S. to their relatives in Mexico — in January this year, the most recent available stats. The overall figure went from $1.7 billion in January 2007 to $1.6 billion this January, according to Bank of Mexico.

    Like or Dislike: Thumb up 0 Thumb down 0

    Hey shrieking anonymous, do you really believe comments here have any effect on the market? Get real dude, the market cycles on its own. If idiots or geniuses are able to make money off a boom then good for them. Just don't be startled when a boom stops and don't put all your eggs in one basket, thats the general message.

    I wouldn't think that would be a controversial message, but then I also wouldn't think the best way to make your point is with all caps or solid bold type, so what do I know?

    Like or Dislike: Thumb up 0 Thumb down 0

    beatstreet Says:
    14

    "and pull up a chair to watch!!"

    Watch indeed…as the fundamentals get worse by the day.

    Like or Dislike: Thumb up 0 Thumb down 0

    /dev/null Says:
    15

    Robby C just guesstimated a 1.5% drop in prices (average? median? benchmark) for April.

    That's 18% annualized in case you're keeping score. Doomsday indeed.

    Like or Dislike: Thumb up 0 Thumb down 0

    The writing is on the wall for western Canadian RE. Inventory increasing, and prices starting to fall.

    The bulls here and on the Alberta blogs are getting angrier by the day! This reminds me of when tech stocks were crashing and angry investors were screaming about how it was the short sellers fault! Now angry RE investors are blaming the blogs!

    Like or Dislike: Thumb up 0 Thumb down 0

    Regarding incomes – Yes, the rich are doing quite well in North America these days. Cheap foreign labor is keeping workers pay low, and increasing corporate profits. The increased profits are resulting in BIG bonuses for people at the top, but none of that money is trickling down to the worker bees.

    Like or Dislike: Thumb up 0 Thumb down 0

    jesse Says:
    18

    "…which is a drop of over 3% since 2000 and it’s down 11% since 1980 when you take inflation into account. That’s surprising given BC’s higher than average employment growth."

    What's really bizarre is how construction wages have decreased even with the supposed labour shortage and massive backlog in residential and Olympic projects. What gives?

    It's always the question that comes up: why Alberta has high inflation and wage growth where BC's low, even with supposedly strong employment growth? I remember having a discussion on this post on mohican's blog along this subject last year.

    BC: low population growth, thin margins, and government budget caps all keep wages down. Some may add to this migrant workers, who are supposedly paid lower, to this but I think the effect is not significant.

    "The increased profits are resulting in BIG bonuses for people at the top, but none of that money is trickling down to the worker bees."

    Remember the separation of Richmond and Vancouver West house prices in the past 25 years — Van West has gone up 1.5X inflation, while Richmond only 1X. Partly due to densification potential but I'm sure there's some income stratification built in as well.

    Like or Dislike: Thumb up 0 Thumb down 0

    Scratchy Says:
    19

    "why Alberta has high inflation and wage growth where BC’s low, even with supposedly strong employment growth?"

    BC has a peculiar labor culture – there's a pretty strong resistance to wage increases just about everywhere. No surprise grow-ops are a huge driver of the economy. Where else is Joe Six Pack supposed to get more cash?

    Like or Dislike: Thumb up 0 Thumb down 0

    to be quite honest – I'm an unfortunate glaring example of the American recession, and the low wages in B.C.

    For years, I've run a business where all my clients have been American – that has completely dried up

    and now that I'm looking to head back into the workforce, I'm finding that the wages offered in B.C.

    are literally 1/2 of what is being offered in Alberta and Ontario

    so, if things don't look up around here soon, I'll be in Ontario this summer.

    Like or Dislike: Thumb up 0 Thumb down 0

    Anonymous Says:
    21

    me, what kind of profession are you comparing salaries for? I know in dental for example the ration is reverse- people are moving from Ontario to Vancouver because they make 2x here.

    Like or Dislike: Thumb up 0 Thumb down 0

    gonebabygone Says:
    22

    I think for most of us paying attention to our basic finances something has been rotten for sometime here in BC. My rent increased 5% this year. My increase at work (despite being told it was "stellar" performance) was only cost of living – 2%. How is that math going to work in the long run?

    Cost of living for average employee + keeping wages to pace = number one risk to all businessess in the GVRD. A friend who is an EMT in Toronto said that Vancouver is throwing everything they can at the wall to try to recruit paramedics to come out here (sign on bonsues, heft moving allowances etc.). No one he knows is stupid enough to bite.

    Like or Dislike: Thumb up 0 Thumb down 0

    Scratchy Says:
    23

    I've been working on annual pay increases lately. The culture around me insists that 2% is standard and that nothing in heaven or earth will alter that.

    Naturally actual inflation in the past twelve months has probably been at least 15% (when working in the things which actually matter like food and gas).

    Net result – the reward for excellent performance this year is a 13% pay cut! Hooray!

    Like or Dislike: Thumb up 0 Thumb down 0

    What happened to the guy who kept ranting and raving about gold? $850 today, sucks for those who rushed out and bought it all up at $1000+. I recall someone out there overlapped gold with VAN RE and it was remarkably similar.

    Current Gold Prices – have a look at the 5 year graph, though it obviously hasn't been updated yet since it looks like the dip is at ~$880.

    Like or Dislike: Thumb up 0 Thumb down 0

    I work in TV animation, which used to be pretty busy around Vancouver – a year or so ago it seems like everyone I knew in the industry was working, but thats all gone to shit over the last year. I know more people looking for work than working now. I don't know if its the exchange rate or what but it sucks. I'm lucky to have a short contract now so hopefully it will turn around in the next couple of months so I'll have something new to move onto. I don't need a raise I just want to be able to earn the same amount of money as last year. stupid recession.

    Like or Dislike: Thumb up 0 Thumb down 0

    read on Says:
    26

    DJ,

    commiserations, but I very much doubt it will turn around any time soon. as you know the film/tv industry was hammered by the writer's strike and the dollar, and why would the americans send work back here for the new season since the whole rationale (ie: cheaper due to the $ difference) has vapourized?

    Like or Dislike: Thumb up 0 Thumb down 0

    anonymous – I'm in communications – and I need big head offices for full-time employment. Out of province – salaries are ranging from 65k – 80k; here the most I can hope for is $40k.

    Like or Dislike: Thumb up 0 Thumb down 0

    TIME Says:
    28

    EXX,

    I am sure you did not pick up the right graph here i got it for your eyes only
    http://www.kitco.com/LFgif/au3650nyb.gif

    Like or Dislike: Thumb up 0 Thumb down 0

    Krissh why are you posting as TIME?

    Like or Dislike: Thumb up 0 Thumb down 0

    TIME Says:
    30

    BDK,

    you are on 20% discount from krrish2,a approved appreciation for vancouver r.e.since-03.

    Like or Dislike: Thumb up 0 Thumb down 0

    punface Says:
    31

    Re: Alberta wage growth. Been to Fort MacMurray lately? Or ever? Hell hole was invented for that place. Only way to get people up there is to pay those wages, and the way the tar sands are going they need people badly. Not saying it's a good thing, but it does explain the wages. As soon as they can they move away again, back to "The best place on earth", which Vancouver does resemble after that wasteland!

    Like or Dislike: Thumb up 0 Thumb down 0

    >

    >

    >

    If you need a good laugh visit Rob's blog.

    Its right out of a WWF script, Rob is defending his honor, and that of the Vancouver press, he is also extending an olive branch to the prodigal son/daughter COCO / and VHB

    And has offered them a place by his right side where they can be guest posters.

    Perhaps it has become necessary for a public televised inquiry to get to the bottom of this,

    It’s of historic and national importance that this matter or Rob not been fully quoted in the Vancouver Sun be cleared up before any other official business can be conducted.

    Like or Dislike: Thumb up 0 Thumb down 0

    alexcanuck Says:
    33

    Sorry, that last Alberta wage growth was me. Don't know where punface came from.

    Like or Dislike: Thumb up 0 Thumb down 0

    punface Says:
    34

    alexcanuck, I was about to say that wasn't me, but then I realized it looked like something I might say, so I was OK with it.

    Like or Dislike: Thumb up 0 Thumb down 0

    /dev/null Says:
    35

    The script that auto-fills the "Name" in the comments section is a bit squirrelly . Not a general WordPress bug though – maybe the theme Pope is using?

    Like or Dislike: Thumb up 0 Thumb down 0

    not rob chipman Says:
    36

    -A-, Now I'm not saying, but your comment "and has offered them a place by his right side" makes me think about cults. Hmmm.

    Like or Dislike: Thumb up 0 Thumb down 0

    Anonymous Says:
    37

    So much of the business that happens here in BC was predicated on a weak Cnd dollar in comparison to the US dollar (when a US parent co. was at the helm). Setting up a web dev, video game dev or animation studio here (not to mention major motion picture filming here) had its obvious advantages in:

    a.) Talent Pool

    b.) Built-in discounts on operations costs

    Today is a new day though. Talent pool is shrinking up rapidly (wage-earners can't afford to stay or are demanding more than they ever have) & since the dollar has hovered at par, we've lost the competitive operations advantage. I predict that business will move elsewhere….it doesn't make sense that companies will take the hit on the bottom line to stay here.

    Lots of smugness on the radio yesterday laughing at Ottawa's #1 place in that Moneysense article but if I had to bet, smaller towns will win the next round as gen-x (et al) try to raise a family. I call it the "tire swing" quotient ;) Nothing new. Same old song, but we somehow forget the tune….

    Like or Dislike: Thumb up 0 Thumb down 0

    What happened to the guy who kept ranting and raving about gold?

    You mean Michael Randalblowhard? Typical troll. When gold was going up, he loved to come here and brag about how smart and successful he was. Now that gold is tanking, he's disappeared. The same thing will happen to krrish and the other RE bulls. Once VanRE tanks, they will disappear also. We'll miss you krrish!!

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    The Pope Says:
    39

    Yeah, the name field bug is an odd one, its completely random and has no consistency I can find. It's likely a result of my hackled together comments script or a plugin, I'll do some tinkering in the next week or so.

    I must admit I don't understand you obsessed Rob Chipman anti-fans. His position on the market has been pretty consistent – the market changes. Should he start espousing extreme viewpoints that he doesn't personally believe in?

    PS: Coco & VHB, I'll give you double the nothing he's offering you to contribute to this site! (although I suspect since you've both run blogs that if you want to post you'll do it yourself).

    Like or Dislike: Thumb up 0 Thumb down 0

    hughz Says:
    40

    "The bulls here and on the Alberta blogs are getting angrier by the day! This reminds me of when tech stocks were crashing and angry investors were screaming about how it was the short sellers fault! Now angry RE investors are blaming the blogs!"

    Kinda like Fox News and Rush Limbaugh blaming the liberal media for the US recession (in order to ensure a Dem in the Oval Office). Couldn't be wacked fundamentals, could it? Some people never learn…

    Like or Dislike: Thumb up 0 Thumb down 0

    Clarke Says:
    41

    The news about income inequality is not a big surprise. Vancouver enjoys a reputation for affluence that was never deserved, when one actually looks at median incomes here compared to other Canadian cities. Well, we have a RE crash, declining incomes, and lots of people in deep debt. Best place on earth, indeed.

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    [...] vancouvercondo.info [...]

    Like or Dislike: Thumb up 0 Thumb down 0

    [...] vancouvercondo.info via mtippett [...]

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    [...] vancouvercondo.info [...]

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    There is wage resistance in Vancouver and it's to the detriment of the long-term success of businesses here. I'm in the marketing industry (no surprise) and many firms simply will not pay people what they're worth. I've worked in firms where the top four performers quit within six month of each other because of management unwillingness to move on wages. Two moved overseas and doubled their salaries; the two that stayed in Vancouver took jobs that pay roughly the same but involve less overtime and less stress.

    I once had a boss who gained most of his experience in L.A. and New York. He told me that Vancouver workers lack the drive and commitment to hard work that he's seen in those cities. I think Vancouver has that top talent but because the salary situation is so dire, many throw in the towel and refuse to give it their all. There comes a point where it isn't worth it to put in 100% when the company is only willing to pay you 60%.

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    beatstreet Says:
    46

    Condohype,

    Why go through the stress of attracting world class businesses here that pay good wages when we already have world class condo towers with some very fine hotels?

    You see, we just import the high wage earnings, if only for three days at a time.

    Like or Dislike: Thumb up 0 Thumb down 0

    Anonymous Says:
    47

    Could you people be any more cynical?

    Like or Dislike: Thumb up 0 Thumb down 0

    Tony Danza Says:
    48

    Could you be any more irrelevant?

    Like or Dislike: Thumb up 0 Thumb down 0

    Anonymous Says:
    49

    I moved from Vancouver to Dublin 2 years ago, and the separation and occasional visits have given me a good perspective on this issue.

    With respect to wages and wage growth, Vancouver has the same problem as cities like Brighton, Nice, Berlin, Venice and Geneva.

    they're all nice places to live, but they in their respective countries, none of them are the place to go to make money or focus on a career (London,Paris,Frankfurt,Milan,Zurich in those countries). You can go there as a maverick, self-employed, business owner or if you are independently wealthy.

    Because the lifestyles there are enjoyable (ocean,lake, cultural intensity) people will accept lower wages just to "enjoy" being there.

    however, most people in cities are employees. And most small business in cities need large business for their services.

    If these big companies don't exist, then it is difficult for the employee or small business owner to make the same living as in a larger city.

    However, due to the "nice" factor, the cost of living is as high or higher than the big city, without the wages.

    I am sure half of London workers would ditch the dull grey days to move to Brighton if they could make the same wage.

    On my last trip to Vancouver, I realised that, compared to a commercially focused city, it is just a big resort and retirement community, with a disporportionately large services industry.

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    Patiently Waiting Says:
    50

    Is Vancouver really such a nice place to live?

    I think you forget this place is dark and wet for half the year.

    Also, there is no cultural intensity here. More like a cultural vacuum

    I've never been to these other cities, but I find it a bit much to compare Vancouver to Brighton, Nice, Berlin, Venice and Geneva.

    Like or Dislike: Thumb up 0 Thumb down 0

    andrew Says:
    51

    @Patiently Waiting

    I would agree it is hard to compare Vancouver to those cities. What i meant to say (I also forgot to identify myself) was that Vancouver is similar in the way that all of those cities are the "beautiful-but-you-make-less-money-than-another-city" kind of place.

    However,now that I think about it, Brighton is cheaper than London, Nice cheaper than Paris, Venice cheaper than Milan, etc.

    Ironically, Vancouver is more expensive than anywhere else in Canada!

    I really don't want to come back, as it is just too expensive. When you consider that if you are a worker with children (as i am), you spend most of your time in an office, commuting and just dealing with your family. Not a lot of spare time for "skiing in the morning and windsurfing in the afternoon."

    so it would be easier to bare 6 months of harsh winter just so you don't have to feel so poor on $150k per year.

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