Millennial flight: Why Vancouver house prices could trigger a labour shortage
Sounding the alarm on Vancouver's real estate market, a new report warns that, by 2025, only individuals working in senior business, construction and engineering positions will be able to afford a house there.
The report, released by Vancouver-based credit union Vancity, says that the rising cost of housing will drive millennials away from the city in search of better opportunities.
In 10 years, the report predicts that just three of 88 in-demand jobs will earn enough to afford to live in metro Vancouver.
"Only those individuals working as senior business managers, senior construction managers and engineering managers will be able to maintain affordable housing," it said.
"In 10 years, most individuals may forgo a career opportunity in the region and relocate to a different labour market. If there is an abundance of outward migration, a labour crisis will occur."
Andy Broderick, vice-president of community investment at Vancity, said the report indicates that most professionals will not be able to afford living in the city.
"It's not only your typical work force housing challenge," he told CTV Vancouver. "It is young professionals who otherwise might be able to buy a home in another market."
Other highlights from the report include:
- Between 2001 and 2014, the cost of housing in the metro Vancouver region increased by 63 per cent, while salaries only increased by 36.2 per cent;
- On average, the salary required to maintain the average mortgage in the region is $78,088;
- By 2025, a household will need an income of $125,692 to afford an average mortgage;
- Vancouver housing is projected to rise by 4.87 per cent a year, but wage rate growth for in-demand occupations will rise only between 0.6 per cent and 3.2 per cent.
The report said more must be to keep millennials working and living in the city.
"High-quality, highly skilled labour is a vital factor of production, especially in a knowledge-intensive economy such as Vancouver's," the report said.
The report suggests the government take steps to address the problem, including amending zoning bylaws so developers are required to make a certain amount of below-market housing units, providing rental housing tax incentives, and repurposing public and community-owned land to create affordable residential units.
It also calls on businesses to adjust wages to meet the cost of living.
Eveline Xia is organizing a rally for this Sunday, calling on the government to address the issue. She said millennials dream of owning a home, but simply can't afford it.
"We don't have a million dollars. We are educated, we're ready to work. We're ready to thrive in the city, but it's not conducive to that," she said.
"We're being told as an entire generation of under 40s that we should expect to rent for the rest of our lives."
In March, the average cost of a detached home in Vancouver and Toronto surpassed the million-dollar mark.