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Technology’s Impact on the Vancouver Real Estate Market (2018-11-23)

Posted By Administration, Thursday, November 14, 2019

Technology in Vancouver has continued to rule the headlines over the past few years. As 5% of our workforce, there are more people in tech roles than in oil, forestry, gas and mining combined. And it’s easy to see why. Not only is this industry future-proof, but it also garners 85% higher wages than the average B.C. salary.

Despite a lucrative and promising future, technology roles continue to be hard to fill. British Columbia in particular faces a job shortfall. By 2021, it’s predicted that 50,000 jobs in this sector will need to be filled. Of this number, only 17,000 are expected to be employed, leaving a 30% shortfall between supply and demand.

Vancouver real estate is predicated on tech companies continuing to thrive, grow and succeed.  

Downtown is increasingly defined by the technology sector, with 2.8 million square feet under construction. Out of the 1.1million square feet of leasing today, 700,000 square feet are made up of tech companies, as well as 64% of all pre-leasing.

With such a high stake in the market, a shortage of skilled talent to continue tech growth is a cause for concern amongst the industry. When there’s no talent, companies will close office and move elsewhere.

“It’s harder for tech companies to get employees, especially as housing and rents have escalated in Vancouver,” said Kevin Nelson, Senior Vice President at CBRE. “Every year the CBRE conducts a survey that compares the top 50 cities across North America. Vancouver was 50th on the list in 2015. Now we’re number 25: a 50% jump in just three years.” 

As a city that’s renowned for limited if not non-existent supply, companies have to think outside the box in order to find office space. This is part of the reason why coworking is blowing up, in particular for startups and small tech companies.

“You’d be hard pressed to find a tech company that can think five years in advance,” said Nelson. “It’s either two things: they’ve exploded in a great way and they have to move on, or things have gone in the other direction and we have to bail them out. No one ever fulfills full leasing terms in the tech industry.”

The Talent Equation: How Can Vancouver Increase Skilled Professionals?

Vancouver is only producing 25% of STEM grads in Canada, so we asked the experts what needs to be done in order to get more people in these fields.

Dario Meli, Founder and CEO of Quietly

“To help aid the problem, we need to fund universities and have those programs really developed so that they can produce a lot more engineering talent, which is the number one deficit that we see. As far as importing talent, our immigration laws are helpful compared to down south, but we also need to get more aggressive to retain people that would normally be heading to the U.S.”

Kevin Nelson, CBRE

“Talent shortage is a real challenge. There are several things we need to do, there isn’t just one answer. One is that we need to work with students earlier on. It’s the ages of 5 to 8 years old when kids start to become influenced in technology. Kindergarten to grade 12 curriculum is critical. Already we’re seeing our educational system do this.

We also need to consider mid-career and life long learning; key skill sets that are going to propel the workforce. There’s also tax reform and immigration reform; these are all key things that will help fill the gap.”

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