Soaring real estate prices in Vancouver has led many millennials to seek out cities with less expensive housing prices and is threatening the city’s technology economy.
Soaring real estate prices in Vancouver has led many millennials to seek out cities with less expensive housing prices and is threatening the city’s technology economy.
Startups especially face the heat as they are not fully equipped to deal with the city’s sky high prices. Real estate prices in Vancouver have shot up at a faster pace than even tech city San Francisco. Rising costs have put Vancouver’s growth at risk as tech employees and other millennials are heading out to affordable locations including Victoria and Kelowna.
Other big cities with increasing housing prices too have seen younger people moving out as they decide their increasing expenses are too much to bear.
Consulting firm Demographia ranked Vancouver as the third least affordable housing market behind Sydney and Hong Kong. It was the eighth straight year the city occupied a top-three spot.
Housing prices in Vancouver have been consistently increasing, the price of a typical home increased 21 percent to around $775,300 in January from the same month a year ago. This is much higher than the 14 percent increase US tech city San Francisco has seen.
Rising home prices in Vancouver has been attributed to foreign buyers from China and other parts of the world, who only buy as a property investment but do not choose to reside in these houses.
Rentals too are not easy to find, while apart from remaining unaffordable the vacancy rate too remains very low. Vancouver’s vacancy rate of 0.8 percent is easily the lowest in the country. Rent prices for newly built and renovated houses are also higher.
All of these factors have combined in making many of the Millennial residents decide it was time to move away, the number of people under thirty leaving the city is an indicator of that.
According to Statistics Canada, The number of people aged 18 to 24 added to Vancouver’s population was the lowest ever last year, at 884, and residents who were between 25 and 44 years old decreased by around 1300.
As the millennial residents find places to relocate to, the technology companies of Vancouver are losing their talent.
“Unaffordability is emptying Vancouver of one of its most valuable assets — young people who grew up in the city and who are invested in it,” Ryan Holmes, founder of Vancouver-based Hootsuite Media, wrote in an opinion piece in a newspaper.
However as tech industry talents exit the city, the city’s growth and increasing prices too may decline, experts feel.
