Rising inflation pushing residents out of Vancouver: economist
Posted January 23, 2022 3:41 pm.
Last Updated January 24, 2022 11:27 am.
As if the city weren’t already expensive enough, it’s possible dramatic inflation could be pushing people out of Metro Vancouver, a Toronto economist says.
“We haven’t seen this level of inflation in about 30 years, so yes, the Metro Vancouver area was always expensive to begin with, but I don’t think most people have experienced in their working lives this level of rising prices,” says Dr. Tu Nguyen, economist and ESC director at RSM Canada, an organization that provides tax and consulting services.
“It certainly is a once-in-a-lifetime event and experience.”
Remote and flexible work environments have also made it easier for people to move to cheaper places without losing their jobs.
While the trend of people relocating to more affordable areas is not new, it has certainly been exacerbated by the booming cost of living.
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“People honestly have not been able to afford housing in Vancouver on the median income for years now,” she said.
“That’s only gotten worse because the prices of single-family houses increased by over 20 per cent. Over the past year, wages have certainly not kept up at that level.”
If the wage gap doesn’t start to close, it will affect households with higher incomes too, she says.
“Vancouver is an incredibly expensive city, right? And for the average household on the lower income spectrum, they were already spending a large amount of their income on food, housing, gas, utilities — all the essentials that you can’t really cut out of the budget,” said Nguyen. “Now, inflation over the past year has been mostly concentrated in these areas.”
Today’s BT Business report. GTA gas prices approach a record high, Canadian inflation at 30 year high. And the forecast for higher interest rates. https://t.co/bFro1XZ1ZI via @YouTube
— Mike Eppel (@eppman) January 20, 2022
For example, gas prices jumped by about 40 per cent and food prices grew by almost six per cent last year.
Meantime, supply chain issues in B.C. are straining industries and small businesses already struggling to get by.
“To solve the inflation puzzle, we have to unclog the supply chain disruptions, and that is just going to take a lot of effort from the government as well as some businesses,” said Nguyen.
Although she thinks inflation will start to go down in the latter half of 2022, high inflation now will still be having tremendous impacts, especially on lower-income households.