It’s known as the “Amazon effect” on real estate.
A flood of high-paid tech workers pouring into a new market, competing for limited housing and driving up prices.
With Vancouver set to be see 3,000 new workers at a new Amazon office at the old Canada Post headquarters, it begs the question of whether the city could soon be feeling the impact.
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Aaron Terrazas, economic research director at real estate database company Zillow, said in nearby Seattle — home to Amazon’s main headquarters — the effect was dramatic.
“We’ve seen rents over the past half-decade go up by 50 per cent, home values have doubled,” he told CKNW’s The Lynda Steele Show.
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That steep price growth wasn’t just driven by Amazon, he said, and reflected a number of complex factors including the recovery from the 2008 recession.
But he said the jobs boom was worth at least 16 to 17 per cent of the rent growth in recent years.
Seattle shares many characteristics with Vancouver. It’s a constrained market dealing with high costs to add new units and is mostly zoned for detached homes, Terrazas said.
But he said Vancouverites shouldn’t be panicking just yet: Amazon’s plans for Vancouver are a drop in the bucket compared to what happened in Seattle.
WATCH: Amazon announces it is bringing 3,000 new jobs to Vancouver
In the Emerald City, Amazon grew from a few thousand employees to more than 50,000 in just a few years, Terrazas said.
“The good news for Vancouver is that they said they’ll hire 3,000 employees by 2022, that’s a couple of years worth of planning, you can get ahead of this curve.”
But in a city with a vacancy rate under one per cent, Terrazas said there could still be challenges.
WATCH: Amazon announces plans to double its workforce in B.C.
He said one factor that played into Seattle’s situation was other tech companies such as Facebook and Google jumping in to locate near Amazon, adding pressure to the already tight market.
Part of the way things play out in Vancouver will depend on whether similar growth happens here, he said.
“This does kind of create virtuous cycles. Once you see one employer that attracts the world’s best and brightest talent to a particular location, that’s going to attract other employers trying to poach that talent,” he said.
“And of course, the most valuable talent can command exceedingly high wages once there are alternative employers in the area.”