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Will smaller homes mean down-sized job opportunities?

With a huge, demographically-driven down-sizing of the kind of homes Canadians live in looming on the horizon, what’s the future for the home-building industry? That’s a sobering question, given the size of the industry and its impact on the B.C. economy, as well as the size of the looming shift as I chronicled in a post last week (accessible here). With baby boomers inclined to downsize as they head into retirement, over the next two decades the percentage of multiple-family units compared with single-family is likely to grow from just under half to more than two-thirds. What I didn’t look at is the impact this shift to much smaller homes will have on the people who build them for a living. As reported by Peter Simpson, CEO of the Greater Vancouver Homebuilders Association, in a Vancouver Sun column (accessible here) a couple of weeks ago, it will cost about $4.4 billion — $3.5 billion of it in wages to 70,000 workers — to build or renovate more than 16,000 new homes in B.C. this year. These numbers reflect a remarkable recovery of the market when you consider that at the height of the recession in 2009, the total tippled to just over 8,000 new homes. But with a high percentage of home buyers already maxed-out in terms of their ability to pay, with interest rates unlikely to remain at their current rock-bottom low over the medium- or long-term, and with the inexorable demographic shift just gearing up, I think it’s time for some serious discussion of — and planning for — the future of the housing business. Follow me on Twitter @DonCayo

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