Vancouver home price surge worries businesses as they seek to hire, retain staff

Sun Dec 28, 2014 8:04am EST
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By Julie Gordon

VANCOUVER (Reuters) - When Allan Pulga, a communications manager, found out he was going to be a father, he had to make a tough choice - stay in a tiny downtown condo or leave Vancouver.

The 34-year-old, who works for fast-growing private Canadian technology firm iQmetrix, packed his bags and moved to Regina, Saskatchewan, where the typical family home costs roughly one third of the price in the Greater Vancouver area.

"When you're a young, single person, you can make Vancouver work financially," said Pulga, who was able to transfer to iQmetrix's Regina office. "But I feel like if it's time to settle down and have kids, maybe you won't stay."

Pulga typifies a worrying trend in Vancouver, where sky-high housing prices are forcing many young professionals out of the city and into long commutes from far-flung suburbs, with some choosing just to leave the region altogether.

That has business groups raising the alarm about Vancouver's ability to attract and retain the talent needed to foster local successes like retailer Lululemon Athletica or tech start-ups like video surveillance maker Avigilon Corp and social media manager Hootsuite.

Vancouver has long boasted Canada's costliest housing. But low interest rates and strong foreign demand, especially from Chinese buyers, have helped drive the cost of a typical detached home up nearly 30 percent in the last five years.

The average Vancouver-area property - including houses, town homes and condos - sold for C$828,937 ($714,786) in November, compared with C$580,326 in greater Toronto and C$306,541 in Regina, according to the Canadian Real Estate Association. In Seattle, on the West Coast of the U.S., with massive employers such as Boeing, Microsoft and Amazon in the area, the median sale price was $436,250 (C$507,184).

On Vancouver's desirable west side, the median selling price for detached homes rose to C$2.6 million in November.   Continued...

Realtors' signs are hung outside a newly sold property in a Vancouver neighbourhood where houses regularly sell for C$3-C$4 million ($2.7-3.6 million) September 9, 2014. REUTERS/Julie Gordon