Housing bubble pushes out young tech workers

According to this article in the Financial Post Millennials are ‘fleeing Vancouver‘ and moving to cities where they can afford housing.

As housing costs have risen, so have the number of people in their twenties and thirties leaving the city. The net number of people age 18 to 24 added to Vancouver’s population was the lowest ever last year, at 884, and the number of 25-to-44-year-olds decreased by about 1,300, the biggest decline since 2007, according to Statistics Canada.

The tech industry is currently one of the key drivers of economic growth in the area, but they’re noticing the shift:

That driver of growth may evaporate as talent exits Vancouver, said Christine Duhaime, founder and executive director of the Digital Finance Institute, which supports Canada’s financial-technology industry. She’s having a tough time filling a 2,000-square-foot (186-square-meter) open-concept office for startups in Vancouver’s historic Gastown neighborhood she opened this year because potential tenants say they’re leaving the city for Victoria, Kelowna and as far away as London and Singapore.

“We’re banging our heads on the wall,” she said. “Why aren’t they staying? Because it’s too expensive. Vancouver is going to lose its tech edge.”

The nearest towns that seem to be benefiting from the exodus of young tech workers are Victoria and Kelowna. Read the full article over at the Financial Post.

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Bestplaceonearth
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Bestplaceonearth

And this will finally cause Vancouver real estate to bust?

Reasonfirst
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Reasonfirst

No, but it kinda implies that Vancouver is not the best place on earth for these people.

bestplaceonearth
Guest
bestplaceonearth

nice try – impersonator!

Reasonfirst
Guest
Reasonfirst

Nice to know who I am impersonating.

Reasonfirst
Guest
Reasonfirst

But have been called worse…

patriotz
Member

When she and her husband moved to Kelowna in September, they traded a 2,700-square-foot, $800,000 house in Squamish, a suburb 45 minutes away from Vancouve,

$800K for a house in Squamish?

Also notable how the exiles find Victoria and Kelowna reasonable – they are the most expensive cities of their size in Canada, by a long shot.

Hyper-mega-Bull
Member
Hyper-mega-Bull

yes, patriotz $800k for a house in squamish. you may not realize this, but prices have gone up. please try to keep abreast of the situation. i feel that this isn’t too much to ask, as this is a real estate blog after all.

Runawayscreaming
Guest
Runawayscreaming

Vancouver is a “North American technology locus”? What? I think Vancouver is a city that claims to be a tech locus because cities that have failing economies claim to be tech locuses. Claiming to be tech locus when you clearly are not a tech locus is a sign of desperation. The main economic activity in Vancouver is selling the city to Chinese citizens and the other economic activity is brazen, out-of-control wild real estate speculation.

Hyper-mega-Bull
Member
Hyper-mega-Bull

more like north american technology hocus pocus. as in, smoke and mirrors.

space889
Member
space889

Apparently we have a LOT of cellphone apps & games start-up companies, and a smattering of dotcom/social media companies like HootSuite. So yeah, in the minds of politicians and locals, we are a high tech locus on par with Silicon Valley.

letsbereal
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letsbereal

locus? I think you mean locusts.

space889
Member
space889

I read before Victoria has more direct flights to Silicon Valley than from YVR. I guess you can’t flack Victoria for being nothing more than gov’t & retiree town like before.

A lot of local YVR companies have their DR centers in Kelowna due to lack of earthquake threat. Personally, given we are way way overdue for the big one, and there is now a new fault line around Victoria Island, I’m thinking about getting out of here into a more earthquake safe zone. Kelowna might actually fit the bill.

franko
Member
Active Member
franko

VANCOUVER SUN Front Page Headline:
“Immigrants help drive housing market, study finds”
Duh, no shit!
Keep up the good work Justin and McCallum.

patriotz
Member

Since you got my curiosity up, neither Vancouver nor Victoria has direct flights to SJC. But I think Vancouver used to, I remember taking one.

Vancouver has 14 direct flights daily to SFO and Victoria has 2.

space889
Member
space889

It was a few years before I read that, because apparently a lot of those Silicon Valley companies have their Cdn companies in Victoria rather than Vancouver. Maybe it’s not SJC airport. But the person who said it was quite explicit about Victoria has more direct flights than Vancouver due to the constant streams of execs going between the two places.

Andy
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Andy

Victoria island? Where the heck is that?

Best place on meth
Member
Best place on meth

Just west of Chinaman Reef.

BubbleTea
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BubbleTea

Prem Watsa, the man that many call Canada’s Warren Buffet: “As we have said a few times before, the collapsing commodity prices will not spare Canada. Canadian housing prices, particularly in Toronto and Vancouver, have gone up significantly, driven by lax policies at CMHC (Canada’s equivalent to Fannie Mae and Freddie Mac). Canadians have accessed their increasing real estate wealth through lines of credit easily available from the banks. Sounds familiar? This is exactly what happened in the United States before the financial crisis in 2008/2009. If history is any guide, this will reverse and we continue to be shocked at the massive debt levels incurred by young people (below 45 years old), with no financial buffer against hard times as the C.D. Howe report, Mortgaged to the Hilt, shows.”
http://www.fool.ca/2016/03/14/is-canadas-warren-buffett-right-about-canadas-housing-bubble/

space889
Member
space889

Ok, but when is the bust happening?!?! If it happens 2 years from now after prices goes up another 50%, doesn’t really help the bears or potential buyers, even if the prices falls 60%.

Enigma
Guest
Enigma

If prices go up 50%, then decline 60% as you say, then a $1M house today would sell for $600K. Leveraged current buyers would be decimated, while bears or potential buyers would fare comparatively better. I’m not sure what point you’re trying to make.

Tiger
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Tiger

THIS IS FROM CBC COMMENT:

They come take our jobs, drive down wage, drive up real estate, now they take our lottery money too. Just rub it in why don’t you.

space889
Member
space889

HAM wins biggest Lotto prize in Canada…when will it stop?! Despairs team BPOM and other bears on this blog. $64M * 5:1 leverage = $300M potential $$ into RE. Maybe Ontario, maybe BC, cuz every HAM wants to live here!

http://www.ctvnews.ca/canada/64m-richer-ontarian-claims-largest-ever-jackpot-1.2816376

Tiger
Guest
Tiger

THIS IS FROM CBC COMMENT:

They come take our jobs, drive down wage, drive up real estate, now they take our lottery money too. Just rub it in why don’t you.

space889
Member
space889
Mister Obvious
Guest
Mister Obvious

If the tech industry is so anxious to locate itself in Vancouver they should be prepared to offer wages commensurate with the actual cost of living here. Have they not done their due diligence by making a study of conditions on the ground in here? Do they expect to just hang up a shingle in Gastown and wait for ambitious, qualified young people to flock to a city of insane accommodation prices without sweetening the pot significantly? These are supposed to be smart people.

space889
Member
space889

Well, that strategy of under paying local talents by 20%+ relative to Seattle works pretty well in the past. Seems like we got lots of smart people who don’t feel like making the 2.5hr move down to Seattle and happily settle for less $$ to stay in Bestest Place On Earth(tm).

Also, aren’t a lot of the offices here also basically holding offices for foreign workers until the companies can get them US H1B visas?

patriotz
Member

Microsoft used to have an operation in Vancouver that hired locals, I knew someone who worked there who was relocated to Bellevue along with anyone else who wanted to move when they decided to close it. As noted their new operation is basically a staging area for foreigners.

As well many engineering oriented companies that used to be locally headquartered such as PMC-Sierra have seen most of their employment move elsewhere. It seems the only kind of firms that are trying to make a go in Vancouver these days are in social media related areas where they think they can get young people to work for cheap or free.

bullwhip29
Guest
bullwhip29

so, vancouver is effectively turning into Las Vegas with its uber expensive, touristy and picturesque d/t core (complete with casinos to boot) which most can’t afford to live in but have to commute to in order to keep food on the table. pretty soon more people than just new moms will have to weigh the pro’s/con’s (not to mention added costs) of coming into the city on a daily basis. so, either the work moves to the outer fringes in the not too distant future or many families will simply pickup and move out of the province (not just out of vanc) as they get entirely fed up with living in 700 sq ft shoeboxes so that they can remain within a 1/2 hr commute from their jobs

space889
Member
space889

Demographic trends seem to say that people are adapting and ok with living in 700 sq ft shoeboxes with their family – witness the rise in families in downtown core, Yaletown, etc.

Plus, look around the world, a lot of population lives in shoeboxes. US & Canada is fairly unique in terms of ubiquitous SFH in big cities.

space889
Member
space889

However, with the big push to toll all the bridges, I do see a Fraser River North & South divide where people will eventually settle on living and working on one side of the river. Maybe that’s the BC Lib’s plan to segregate the working class from the wealthy class.

Metrotown is also developing to become a bigger office center.

Best place on meth
Member
Best place on meth

Teranet’s February numbers show most cities flat to down, with 2 notable exceptions.

Vancouver +3.2%
Victoria +0.9%

http://www.housepriceindex.ca/

bestplaceonearth
Guest
bestplaceonearth

And this is supposed to cause the re crash right?

Many Franks
Member
Active Member

Meanwhile in Calgary, a realtor invents an extra 500 square feet on a listing to get it sold. A woman buys it, invests a bunch of money in upgrades, sells it at a loss, sues realtor and loses. Real estate council gives realtor an advisory note. It’s hard to have sympathy for anyone in this circus.

Calgary homeowner says realtor who ‘misrepresented’ square footage on MLS cost her thousands

space889
Member
space889

So I guess she didn’t find “Measurements are approximate, buyers to verify if important” line to be important?

not a lot of sympathies for her but still I’m surprised that such a blatant lie is not being punished at all. This is the kind of things that put an entire industry/profession in a very bad light.

Many Franks
Member
Active Member

Oh, and I don’t think I’ve seen this one shared here yet.

Existing house damaged by fire, do not enter. Buyer to demolish existing structure.

$2M for a burned-out crack shack just two blocks from Nanaimo and 1st!

space889
Member
space889
southseacompany
Member
southseacompany

“Fairfax CEO Prem Watsa warns investors face ‘huge’ potential for pain”, BNN video

http://www.bnn.ca/News/2016/3/14/Watsa-warns-investors-face-huge-potential-for-pain.aspx

“Fairfax Financial CEO Prem Watsa laid out a litany of risks in his latest letter to shareholders. From plunging commodity prices, to Canada’s housing market and frantic policymaking in China – he’s telling investors it could all come to a head early this year.”

““Canadian housing prices, particularly in Toronto and Vancouver, have gone up significantly, driven by lax policies at CMHC, “ he wrote, in reference to the country’s top housing watchdog.”

““Canadians have accessed their increasing real estate wealth through lines of credit easily available from the banks. Sounds familiar? This is exactly what happened in the United States before the financial crisis in 2008/2009.””

BubbleTea
Guest
BubbleTea

Are we going to see a slow down in the Vancouver real estate market very soon?
“Economists say tightened capital controls are one reason China’s foreign reserves fell only $US28.6 billion in February, less than a third the drops of the two previous months.”
http://www.theaustralian.com.au/business/wall-street-journal/china-stifling-companies-as-it-battles-money-exodus/news-story/f32eb92e80164bf108f73a15abf36382

Best place on meth
Member
Best place on meth

I don’t trust those numbers due to CNY distorting all financial activity in February.

If the same thing happens in March, then there may be something significant going on.

Combat roach
Guest
Combat roach
Best place on meth
Member
Best place on meth

Time to take up remote controlled drones as a hobby.

Mine is going to have lasers.

fosolo1
Member
fosolo1

A shame we’ll never hear about Prem Watsa’s view on the Canadian housing bubble on Global news. So much for fair and balanced reporting .
Instead we get every breathless realtor trotted out with a ” sky is the limit ” forecast.
Something is really wrong when the evening news has the caption (Sponsored by Remax)
No conflict of interest there, eh.

franko
Member
Active Member
franko

Our esteemed Prime Minister trying to entice more immigrants:
http://www.youtube.com/watch?v=R8ypraEielc

BubbleTea
Guest
BubbleTea

No Flying Roaches or Locust please. We would like the ones that would genuinely like to come to this country and contribute to it and not use this country to launder its dirty money.

voter
Guest
voter

It doesn’t matter if these people stay or not. Twenty five years ago there was lots of industry here and they left.There are over 1 billion Chinese ready to take your place so get used to it .

voter
Guest
voter

Liberals going to make it easier for International Students to become Canadian citizens .The Government calls them The Cream Of The Crop ,so do you think they really care if young people move out of Vancouver .The machine doesn’t care where your from or how long you’ve been here.All as they want are people .

OpenCourse
Guest
OpenCourse
OpenCourse
Guest
OpenCourse

Chinese international student said he had intended to invest $6 million in Vancouver, but now change his mind. Because. Police gave him a ticket for driving a Bentley with a fake license plate, even though he had a valid B.C. driving license. Is that a brilliant logic or a habitual lying mind
https://translate.google.ca/translate?hl=en&sl=zh-CN&u=http://city365.ca/van/222200&prev=search

OpenCourse
Guest
OpenCourse

Chinese national, Tao Liu in Canada fraudulently on a student visa, is believed to be hiding in Richmond.
http://globalnews.ca/news/2513717/suspect-in-violent-kidnapping-of-victoria-foreign-student-missing/

paulb
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Active Member

New
381
Sold
266

TI:8156

http://www.paulboenisch.com

bestplaceonearth
Guest
bestplaceonearth

And this is going to cause Vancouver real estate to bust?

Best place on meth
Member
Best place on meth

I can’t believe you only have 10 votes.

space889
Member
space889

And I can’t believe you haven’t volunteered for the Uighur Independence Movement given how much you expressed interests in killing Chinese people, and how much you love freedom & democracy.

Hyper-mega-Bull
Member
Hyper-mega-Bull

link?

Whistler or Bust?
Guest
Whistler or Bust?

A friend of mine just bought this place in Palm Springs:
https://www.redfin.com/CA/Palm-Springs/2931-Twilight-Ln-92264/home/22529034

Interestingly he rents in Vancouver.

Look what $1 mil C$ buys you in an extremely desirable international destination. I would guess more people in the world know where PS is vs Vancouver.

Forget all the BS that idiots here are spinning. HAM will be the first to bail as soon as prices start to slip.

I said the LONG TERM top would come in the first half of this year and I am sticking to it.

Bears you might have been wrong but are not crazy.

wwwww
Guest
wwwww

>HAM will be the first to bail as soon as prices start to slip.

Prices have slipped a already and HAM didn’t bail. 2008 and 2012.

>I said the LONG TERM top would come in the first half of this year and I am sticking to it.

What does that EVEN MEAN?

>Look what $1 mil C$ buys you in an extremely desirable international destination.

Palm Springs is not an international destination. It’s a regional destination. But if you want to buy there, be my guest. Keep in mind that it gets a bit warm in the summer.

Whistler or Bust?
Guest
Whistler or Bust?

1. HAM was not near the factor in 2008 as they are today. 2012? A blip. A drop of 10% HAM will move onto to the next shiny thing leaving overextended locals to support prices.
2. Pretty self expanatory
3. Vancouver gets pretty wet in the winter.

Just noticed that the Yaun has slipped about 10% vs the C$ since the highs a few months ago. Another tailwind inflating the bubble gone.

wwwww
Guest
wwwww

>Another tailwind inflating the bubble gone.

Do you expect to see it reflected in sales?

Shut It Down Already
Guest
Shut It Down Already

Palm Springs is definitely one of the nicer places in Australia…

wwwww
Guest
wwwww

Canadian housing prices are not sustainable: David Rosenberg (July 11, 2012 )

http://business.financialpost.com/business-insider/canadian-housing-prices-are-not-sustainable-david-rosenberg

Pour one out for the housing bears who didn’t make it to 2016.

http://therapinsider.com/wp/wp-content/uploads/2014/09/pour-one-out.jpg

southseacompany
Member
southseacompany
“New Mortgage Rules Introduced By Liberals Driving Up Housing Market: National Bank”, Huffington Post http://www.huffingtonpost.ca/2016/03/14/new-mortgage-rules-canada-housing-market_n_9460702.html “The Liberal government’s new, tighter mortgage rules were meant to help keep the housing market from overheating, but National Bank says the new rules are doing the opposite, at least for now.” “The new rules require insured mortgage holders to put down a minimum of 10 per cent for any portion of a house’s price above $500,000. The 5-per-cent minimum down payment still applies for the portion of a house price below that. Economists predicted last year the rules would temporarily drive the market up, as homebuyers raced to land a mortgage before the deadline. But Pinsonneault says the effect will continue this year, because the new rules don’t apply to anyone who locked in a mortgage before Feb. 15 of this year, and those… Read more »
Hyper-mega-Bull
Member
Hyper-mega-Bull

learn mandarin.

China buys soft power with hard cash in Hollywood

http://news.yahoo.com/china-buys-soft-power-hard-cash-hollywood-032246000–finance.html

Many Franks
Member
Active Member

Here’s a pretty serviceable lament that pits anecdote against vacant-house data. And , notably, it’s from a homeowner.

Jane Macdougall: Tales from the trenches of Vancouver’s real estate market

There are four properties on my block with survey stakes. The house three doors over got bulldozed this weekend. It had been empty for more than a year. The Vacant Housing Unit Research report presented to Vancouver city council this week declares that the percentage of vacant houses has remained flat since 2002. I must be hallucinating. At least six of the homes in my neighbourhood are perpetually empty. One house is up for sale a third time without ever being occupied. Halloween is no fun in my neighbourhood.

space889
Member
space889

Uhmm…anecdotal evidence doesn’t necessary contradicts with the report % of empty homes. Houses stay empty for year or two and then get demolished for a new house, which means that demolished house is no longer an empty house, but a new build in construction. While other houses joins the rank of empty houses.

Plus, a lot of the houses are occupied during school year so they aren’t technically empty for the full year and likely isn’t counted.

elvince
Guest
elvince

Since 2002? Not that many empty houses in 2002. Not enough that one could see them with a naked eye. Now they pretty much scream at you.

space889
Member
space889

Only because it has become more of an issue and so people notice it more…
There were already reports of Vancouver West school being heavily Asian/Chinese back in 2002 and most of those students don’t live here all year.

elvince
Guest
elvince

I love the quote from one of the commentors:
“Christy Clark, the best politician CHINA has had in a long time !”

West Coast Woman
Guest
West Coast Woman

There was a Globe and Mail article by Kerry Gold, published last week, which explains, among other things, that houses where the power was turned off were not counted vacant.

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