HOW THE TECH BOOM IN TORONTO IS GOING TO DRIVE REAL ESTATEBy CondoWong Friday, September 06, 2019
When I worked as a digital hardware design engineer, more than 10 years ago, Toronto was not an awesome place for high tech jobs.
Fast-forward to today, Toronto is now ranked #3 in North America for tech talent, just after #2 Seattle and #1 San Francisco Bay Area, The Silicon Valley.
Over the past couple years, I kept hearing big firms like Microsoft, Twitter, Google, Netflix, making announcements about their office openings in Toronto.
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Not only Google, but Uber annouced that they will be investing $200 million dollars in Toronto to open an engineering hub.
They are also planning to expand their self-driving vehicle centre here in Toronto.
There are 2 very important points in his speech.
#1Toronto is a very nice place to live and the cost of living is attractive.
Indeed, when you compare us with the top 2 tech cities.
In the #1 tech city, San Francisco Bay Area, the average rent is $2,856 USD per month.
And the living cost is 163%, meaning that it is 63% more expensive than the United States National Average.
In the #2 tech city, Seattle, the average rent is $1,694 per month and the living cost is 137%.
In Toronto, the average rent is $1,363 per month and the living cost is 118%.
These numbers came from the latest CBRE tech talent report.
The Uber CEO was certainly right when he said that the cost of living in Toronto is attractive.
The 2nd point that he mentioned was about recruiting and attracting talents from all over the world to Toronto.
In the past 5 years, there were 80,100 tech jobs added in Toronto! But there were only 22,466 graduates from a tech related degree.
That means we gained over 57,600 talent workers from outside of Toronto.
The tech talent quality vs cost analysis may shed some light on why so many tech jobs were created in Toronto.
As you can see, Toronto is the cheapest city in the very high labour quality category.
Much cheaper but still has a very high quality. If you own a tech business, you would open an office in Toronto as well, right?
The influx of tech workers is creating a very big impact on both commercial and residential real estate in Toronto, especially downtown Toronto.
Studies have shown that tech workers don’t want to settle outside of the downtown area, so companies have to find office space in downtown.
Tech now accounts for more than a third of the demand for office space in downtown Toronto.
Obviously, these workers would need a place to live too, right?
That’s one of the reasons why the housing demand in the downtown area keeps going up.
Can this tech boom last?
Well, I think Toronto has 3 very big advantages that will continue to attract tech companies into the city.
Canada is welcoming a large pool of skilled immigrants to our country.
In the next 3 years, we will be expecting around 1 million new immigrants to Canada.
Around 17% of them will be coming to Toronto, that’s 170,000 more people in the city of Toronto.
Let’s just assume there are 2 people in each household.
That means we would need 85,000 housing units in Toronto in the next 3 years to accommodate the new comers.
#2 University Graduates
There are 3 universities in downtown Toronto alone.
The university graduates are certainly our great asset to attract tech companies to come and open their offices in the city.
#3 Solid Banking Sector
Toronto is ranked as the 2nd highest financial centre in North America, just after New York.
I’m certainly very excited to see how the tech industry is going to transform the city of Toronto.
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