VANCOUVER’S LOST GENERATION
With finances stretched to the limit, millennials consider taking flight from the city
Peter Aziz and Mike Bradley know a fair bit about the financial challenges faced by millennials in Vancouver.
In their late 20s, they also grapple with the high costs of living.
Yet Bradley and Aziz are also filmmakers who co-founded the boutique video production company Pixel Motion Films.
And they recently made a short documentary with a title that speaks directly to the barriers faced by young adults in Metro Vancouver.
Called Vancouver’s Millennial Crisis, the five-minute film examines the economic obstacles facing this age group.
“It focused on affordability in Vancouver and how, for example, getting by is difficult for students trying to live close to school,” says Aziz, 28, whose company received funding from Coast Capital Savings to make the film.
Of course, the challenges affect more than students.
“Graduates often can’t afford to live here, and they are now leaving,” adds Bradley, 27.
Indeed, Statistics Canada data point to this troubling trend. Since 2008, the city has experienced annual net losses of individuals aged 25 to 44.
Plenty more have given it serious thought, according to a survey by Vancity from last year that found more than two-thirds of those polled were considering moving elsewhere.
It’s hardly a surprise. Perhaps more than any other generation, millennials are hard-pressed to get ahead in Vancouver. Struggling with high debt loads, stagnating wages and rising costs, they are fast becoming an endangered species in the city. Yet many are finding ways to make it work. Although often maligned as self-indulgent, selfie-snapping snowflakes that melt in the face of adversity, Vancouver’s millennials are defying stereotypes and forging their own financial paradigm to gain a footing in an increasingly steep economic landscape.
Entrepreneurs like Bradley and Aziz are trailblazers in this respect, working in the film industry since their teens, and able to set aside a little cash along the way.
Aziz has long been saving to purchase his first home.
“I’m just waiting to get into the market because I don’t want to have huge mortgage that I can’t afford,” he says.
With the average price of an apartment-style condo in Metro Vancouver exceeding $500,000, first-time buyers like Aziz would be facing a monthly mortgage payment in excess of $2,000. That’s roughly $30,000 of pre-tax income, not including utilities, insurance and property taxes.
Bradley has taken a different route to ownership, buying a 25 per cent stake in his parents’ Vancouver home.
“If you want to own a house, you have to get creative,” he says. “I don’t see myself living there forever, but it was an opportunity to buy into the market.”
In contrast, many peers have up and left.
“I can safely say a lot of friends have moved out to the (Fraser) Valley where it’s a lot less expensive than Vancouver,” he says, adding the move boosts their cash flow so they can pay off debt, buy a home, start a family and save for retirement.
“To do all those things in Vancouver is quite unrealistic for a lot of people.”
And those who stay often struggle with much higher levels of debt than previous generations, according UBC’s Paul Kershaw, who heads up Generation Squeeze, an initia- tive aimed at bringing these issues to the forefront for policy-makers. The professor at the School of Population and Public Health says the average British Columbian under age 35 is more indebted and has less net wealth than the same age group almost 20 years ago. Millennials today have $20,000 more total debt while adding only $1,000 more net wealth compared with the same demographic in 1999. In contrast boomers have gained $370,000 in net wealth while their total debt increased about $33,000 over the same span. Kershaw argues the surge in the cost of housing relative to income, which has fallen over several years after accounting for inflation, is largely to blame.
For example, millennials now earn about $8,000 to $10,000 annually less in today’s dollars than the same age group did 40 years ago. At the same time, the average price of a home in Metro Vancouver has increase from about $245,000 to more than $800,000.
“We could talk for days about how the housing market is crushing us,” says Justin Lee, a 26-yearold chartered professional accountant.
But it’s a host of economic challenges overwhelming millennials to the point where they don’t even know where to start to address these pressing problems, he says.
That’s why Lee and two friends — Irvin Ho and Shun Lee — started a personal finance education website called Young Guys Finance (youngguysfinance.com).
“It became a scratching an itch type of thing,” he says, adding they struggled to find good financial education resources after graduating from post-secondary.
“We take a different approach than most online resources; it’s personal finance education by YouTube.”
Besides offering budgeting, credit card and other basic financial management tips, the site also addresses investing for long-term needs like retirement.
“It is kind of bugging you in the back of your mind — you know you should put money away — but there are a lot more pressing things,” Lee says, adding RRSP season has little meaning for cash-strapped young adults.
The upside is technology has made it easier to manage various, often competing financial priorities. Lee points to budgeting apps as an example.
“Mint.com has one that I use to track my spending.”
Advances in fintech have also made investing in small, regular increments at low cost — ideal for people just starting out — easier thanks to robo-advisory platforms offering access to portfolios of low-fee exchange traded index funds.
Although fintech won’t change the economic conditions making life expensive in Vancouver, it does help millennials take more control of their finances, Lee says. And for the time being becoming masters of their economic destiny — as much as possible — is likely the best option available.
“We can go back and forth about how the government isn’t doing enough,” Lee says. “But at the end of the day it’s our choice to live here, so we have to find a way.”