Despite concerns about Vancouver’s high cost of housing pushing young people out of the city, the region has seen a significant increase in the 30-to-40 age group over the past three years, according to a recent report from the Bank of Montreal (BMO).
Since 2012, 16,000 people in that age group have moved to the city, numbers not seen since the end of the 1990s. That’s reversed a period of stagnation that occurred from the early to mid-2000s, and it’s one factor behind the city’s dizzying real estate market, said BMO economist Robert Kavcic.
Growth in the number of young families in Vancouver has been “choppier and flatter” than in the region as a whole, Kavcic said, based on data from the Vancouver school district, meaning that young families are likely being pushed to the suburbs to find affordable housing.
International immigrants are also continuing to choose to make Vancouver home. And Alberta’s pain has been B.C.’s gain: the drop in oil prices has largely halted the eastward flow of workers to Alberta’s oilfields.
That combination of factors is making for a positive demographic trend: overall, Vancouver’s population has grown at a “sturdy” 1.7%, year-over-year. Those demographics, the Bank of Canada’s interest rate cut in January and “an assist from foreign buyers” are supporting the demand for housing, BMO says, which this spring overshot supply and fuelled price increases and bidding wars.
On the controversial subject of foreign buyers, BMO notes that a lack of data means the effect on the real estate market can’t be quantified, but “this group is probably adding another layer on top of already-solid underlying demographic and interest-rate-driven conditions.”
Economists have predicted that the economies of B.C. and Vancouver will be particularly strong in 2015, and BMO is sticking with that forecast. B.C. is still expected to lead the country in economic growth. BMO is now predicting GDP will increase 2.4% in 2015, down slightly from a previous prediction of 2.5%.
Vancouver’s labour force, demographics and strong housing markets are all positives for the city’s economy, said Kavcic. •
