Amazon recently announced plans to convert the old Canada Post site in Downtown Vancouver, into its new base of operations, in the process creating 3,000 new jobs by 2022. This will mean that there will be thousands of extra workers needed homes in a city already facing a shortage of affordable housing.
Amazon has been gradually increasing its workforce footprint in the Lower Mainland of BC over the past few years. The current workforce scattered around the lower mainland stands at 1,800 and by 2022 will explode to 5,000. But it will not stop there.
Consider Amazon’s presence in the Seattle metro area where in 2010 the company had 5,000 employees. Today there are around 40,000, making Seattle one of the fastest growing US cities.
According to Zillow, rent increases in the neighbourhoods that experienced the greatest influx of theses workers have risen 65% faster over the past 5 years than areas with the smallest influx.
Then consider the “Amazon effect”. Amazon attracts other companies that also want that talent, so they move their offices closer to the Amazon hubs, and this causes a larger influx of people.
Experts have commented that with Amazon’s higher pay to its tech workers, they will be able to afford higher rents and mortgages, creating more incentives for higher end housing developments. This would crowd out the working class and force them to leave the city.
Vancouver has one of the lowest rental vacancy rates in North America, and the price of a benchmark home has risen 91% over the last 10 years. Despite government attempts to ease prices, real estate is becoming more and more expensive.
Unless there is some drastic policy change that forces a net out migration of people from the Lower Mainland, it seems that we are continuing to experience an influx of population into our beautiful city. So would you not want to become a real estate investor in this market?
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