Thursday, June 07, 2007

Population Growth

By popular demand here are the population growth statistics for Vancouver CMA and BC as a whole. Thank you to the VHB for compiling these stats and making them available to us.
Needless to say the chart indicates completely anemic population growth for the past 8-10 years. I hear more anecdotes every month of more and more people leaving the area than coming in so I don't really understand where the idea comes from that there are so many people moving to the area.

Where is this so called population boom?

25 comments:

-\/- said...

Cheers. Nice number.

Close to Sauder's number, although Sauder's seem more pessimistic about Q4 of 2006. They give growth below 1% for Vancouver.

The next natural question is: how is building keeping pace with population growth in Vancouver?

Anyone has an idea to gauge the supply side?

mohican said...

Vancouver CMA Completions
1997 16,041
1998 13,927
1999 11,102
2000 9,106
2001 8,004
2002 12,068
2003 13,394
2004 14,302
2005 15,834
2006 18,072

Keep in mind that the average household size in GVRD is 2.6 people. So if you have 18000 new homes built with 2 people each that means 36,000 people. Population growth has been much lower than that so clearly there is overbuilding happening.

RentingSucks said...

Are we overbuilding?

It looks like the raw population number for 2006 is 52464 (I'm assuming this is YOY.)

Take the completions in 2006 multiplied by 2.6 and you get 46987. This is shy of the population growth number.

Is there something wrong with my math?

mohican said...

Nothing wrong with your math rentingsucks just looking at the wrong chart. The CMHC completions I posted are for Vancouver CMA only whereas you are looking at BC wide population stats.

Vancouver CMA pop growth was just over 27000 for 2006 and had 18000 completions.

BC had 52500 people in 2006 and 36500 completions in 2006. Those 36500 completions should hold 94000 people at 2.6 / household.

freako said...

"anemic population growth "

I used this term just yesterday. Groupthink?

On that topic, any thoughts on why BCREA posts net migration numbers as percentage change in increase rather than as population growth? Standard practice or obfuscation?

"It looks like the raw population number for 2006 is 52464 (I'm assuming this is YOY.)"

That sounds high. Is that the B.C. rather than the CMA number?

-\/- said...

Mohican thanks for the numbers, they are great.

Although 2006 was a strong supply year, the same cannot be said of the previous 5 years.

It seems to me that for the 200-2005 period population growth was higher than new builds, which would explain the run-up in prices even better than interest rates alone.

Am I wrong?

-\/- said...

....and, any chance we could see a prolonged spell of supply exceeding demand? That seems to me the only way to rebalance prices....

Warren said...

Mohican,

Reharding 2.6 people per household in the GVRD, do you have any statistics on how this number has changed recently and where its heading? I thought we had passed below the 2 people per household level, was that just for Vancouver? Or downtown? I could have sworn I read something like 1.7 or a similar stat on a blog... it may have been VHB.

mohican said...

For simplicity, lets say Van CMA population growth has averaged 30,000 people per year for 10 years. Building completions / supply has been adequate to meet that demand (approx 12,000 completions should satisfy 30,000 people) in 7 of the 10 years. In the past 3 years it would be fair to say that supply has far outstripped demand and will again in 2007. Some of that demand was 'pent-up' from 1999-2002 but now the situation should be resolved by the overbuilding of the past 3 years.

jesse said...

"do you have any statistics on how this number has changed recently and where its heading"

This was discussed a few months ago. The population per household has been steady in the past 5 years after a long decline since the 1960s.

On this topic, I never received closure on how basement suites factor into the "population per household" figure. Statscan is handling illegal suites differently compared to previous censuses but I could not ascertain how suites similar to those seen in GVA are accounted for.

mohican said...

The GVRD keeps stats about household size here.

Household size has been stable for a while now (2.6 persons / household).

-\/- said...

Mohican,

so it sounds that the overbuilding was just enough to soak up the excess pent-up demand from the middle 1990s?

It seems to me that we should see lower prices in the future if population growth slows consistently and building stays high for at least 2 more years.

The big question is on migration to Van? Is this a blip or the beginning of a longer period of slower migration?

mohican said...

I am going to venture a guess here that we will see 0-1% population growth here until real estate prices correct to a more affordable level. Vancouver is a nice place to live with some decent opportunities in certain industries but its not "that nice" - as in $500,000 for a tear down house on the east side 'nice.'

Anecdotally, I hear about professional people leaving all the time because of the poor opportunities here and high cost of living. If you can make $100k here or $100k in Seattle, why would you stay in Vancouver where it's 2x the cost?

I would probably also argue that supply met 'real demand' in late 2005 or early 2006 and since then we have been adding to the supply because of what I call 'transactional overhang' in the real estate market. That is the overhang of supply that exists because of speculators/flippers and the high turnover rate of housing - e.g. houses sit empty while waiting to be occupied by new owner as new owner occupies two housing units for 3-6 months.

At this point it is hard to gauge how many speculator bought units are vacant or will be vacant once completed this year. Vancouver CMA should see another 17-18k of completions this year.

jesse said...

"so it sounds that the overbuilding was just enough to soak up the excess pent-up demand from the middle 1990s?"

Building must always lead population growth or the people per household figure would increase. In other words, the pent-up demand from the '90s was using up existing stock. If they bought a newly constructed building they would have had to vacate another. The only way new construction can be resolved is with population growth (small), fewer people per household (no), demolition of existing properties, or vacancies.

Deliverator said...

On that topic, any thoughts on why BCREA posts net migration numbers as percentage change in increase rather than as population growth? Standard practice or obfuscation?

Obfuscation, obviously. It's no coincidence that their % change in population increase figure closely matches the property price appreciation they are predicting.

Warren said...

Anecdotally, I hear about professional people leaving all the time because of the poor opportunities here and high cost of living. If you can make $100k here or $100k in Seattle, why would you stay in Vancouver where it's 2x the cost?

I haven't personally heard of people moving due to high housing. I hear a lot of people whining about the price of RE, but "housing" in terms of rents is not out of line with incomes.

Seattle might not be the best example, there are a lot of variables when you're moving to another country. Immigration laws being one of them. Toronto or Calgary might be a better example.

Furthermore, the economy is doing well by most measures, and many companies are flush with cash. They aren't going to let skilled people up and leave without some kind of offer, especially now when they are hard to replace.

Warren said...

Speaking of supply, wasn't somebody continuing VHB's chart of completions? I think it was just downtown, but an update to that chart would be interesting. Especially since we know how those things slip, I'm sure actual completions are far below what was predicted.

Is this the case even in really low RE markets?

-\/- said...

Hi guys,

look at this

http://tinyurl.com/yw8dp3

It seems like a big thing going on.

If we have prolonged high interests and low population growth......

Patiently Waiting said...

People rarely move only because of high housing costs -- in my experience, its primarily for career advancement or education -- but it sure helps people leave...and not come back. Its funny how many people I know who have left in the last few year...and not come back. Once you own a large home in Calgary or Ottawa, it must be hard to move back to the housing reality of Vancouver. Even when you consider the weather.

patriotz said...

many companies are flush with cash. They aren't going to let skilled people up and leave without some kind of offer

Companies that have competitors in other cities can't pay their employees more than their rivals do. How hard is that to figure out?

Toronto or Calgary might be a better example

No not Calgary, it's losing jobs not connected to the oil industry for the same reason. But it least it has oil. So what's keeping the money flowing in Vancouver?

Patiently Waiting said...

From what I've heard, despite the labour shortage, significant pay increases are pretty rare in Vancouver. Many employers would just rather cope with being understaffed.

jesse said...

mohican, as we have talked about before, you want to compare household formation, not completions, to population growth because some new construction will replace existing stock.

Sam said...

As far as salaries in BC go, I can confirm that shortage or no, BC employers are not keeping pace with employers in the US or Europe. I can't speak for Ontario. But as someone who is working in the UK as an "economic refugee" from BC, I can say that BC looks very little improved over when I left, as far as salary opportunities (and, importantly, benefits) over Europe.
Now, people might say "it's all very well to talk about Europe when most people in BC can't up and move there" but that's exactly my point. If BC wants to claim that the boom is due to global wealth, then they have to recognise that that same global economy and wealth will mean the most skilled people will be choosing from all over the world. And it's the least skilled, and least important to the global economy, who will stay in (e.g.) Vancouver.

freako said...

"because some new construction will replace existing stock. "

Does anyone keep stats on how many buildings are removed from the housnig stock for whatever reason?

Is there a reasonable estimate we can use to factor this in? Also, I'd expect:

1. That most of the one for one knockdown and build occurs in Vancouver/GV but barely at all in FV.

2. In Vancouver (and other denser areas), it is one for many, as single houses are replaced by duplexes, townhomes, or condos depending on zoning.

jesse said...

"Does anyone keep stats on how many buildings are removed from the housnig stock for whatever reason?"

Statscan tracks "dwelling count" which when compared to previous censuses is a good gague to compare the replacement percentage but you would need to assemble the dwelling and construction data manually. Also I don't think the '06 dwelling stats are available until Q407 (again, I don't know how illegal suites are accounted for).

"single houses are replaced by duplexes, townhomes, or condos depending on zoning."

Also in Vancouver teardowns will usually be replaced with houses with more suites and/or bedrooms (except some affluent neighborhoods where de-densification can occur coughPointGreycough) -- densification of sorts that adds to available dwelling stock.

On the surface the construction numbers may overstate household formation due to demolition. But on the flipside you can argue that, accounting for basement suites, household formation could be understated!