High-priced Vancouver losing residentsCommentary:
Alberta oil field jobs a major magnet
Hard on the heels of The Economist Research Unit’s just naming this British Columbia metropolis one of the world’s three best cities to live — just behind Melbourne and Vienna — comes word from the provincial government that “young people are fleeing B.C. in big numbers,†as one daily’s headline put it, citing new government numbers from B.C. Stats.
This is happening just as Vancouver’s red-hot housing market — easily the priciest in Canada — is finally starting to cool, with sales stagnant and prices finally starting to drop a bit. The price of an average single-family detached home is still hovering around C$800,000. For some, home prices here just weren’t dropping fast enough.
The latest government numbers show that from January to March this year, 2,554 people, mostly Vancouver-area residents, left B.C. for other provinces. That’s an eye-popping jump, accelerating a negative trend started last year when B.C. logged a net migration loss to other Canadian provinces of 1,920.
The chief economist for Central Credit Union 1, confirmed that B.C.’s out-migration “seems to be accelerating.â€
Every time I visit here, which is often, more and more ‘For Sale’ signs have popped up in front of Vancouver homes and condos.
I’ve seen this movie before — in pricey Sonoma County wine country just north of San Francisco where my wife and I sold our home and decamped to a town in Washington state just south of B.C. We’re California “equity refugees.â€
Canadian news reports say that many of those young families leaving B.C. are heading for Alberta, where oil-patch jobs are going begging. I’ve even seen advertisements for jobs near Calgary appearing on the San Francisco Chronicle’s website recently.
But, many are wondering — and Commenters here have long predicted — is Vancouver headed for a disastrous popping of its supposed housing bubble, as happened in the US., a pop that will cause Vancouver home prices to plummet? We sold our home in the prime Pinot Noir-growing Russian River area north of S.F. in 2006, and it recently had lost 60% of its value, according to real estate website Zillow.
I don’t think Vancouver has the same kind of housing bubble California and the U.S. had.
For one thing, this city’s seen, and is still seeing, a huge wave of cash coming in from China, boosting home values. While it’s true this makes B.C.’s housing market reliant on the Chinese economy, many of those homes bought by Chinese were bought with hard cash, not highly leveraged, U.S.-style funny money (subprime loans, etc.). Plus, Canadian banks have much stricter lending standards than their U.S. counterparts.
Also, many of the homes bought by Chinese immigrants here are second homes. “They’re insurance policies for wealthy Chinese in case things in China turn south,†a Vancouver realtor told me recently. “Some of them are vacation homes, and sit empty. They’re seen as insurance policies for a rainy day.â€
Still, many keep insisting Vancouver has a housing bubble that’s about to burst.
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