Housing Trends An Eye on the Market

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Housing TrendsAn Eye on the Market

• Bernie Vogt, President
• Prudential Real Estate Affiliates of Canada, Ltd.
• Steve White, President
• Thought 2 Finish Consultants Ltd.

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Bernie Vogt, President

• Prudential Real Estate Affiliates of Canada, Ltd.

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Agenda

• Four Year Track
• Canada Year-to-date
• Regions Year-to-date
• Major Markets Year-to-date
• Future

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The Last Four Years
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Canada to June 30/07
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Regions
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British Columbia to June 30/07
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Alberta to June 30/07
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Saskatchewanto June 30/07
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Manitobato June 30/07
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Ontarioto June 2007
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Quebecto June 30/07
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Major Centre Overview
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Atlanticto June 30/07
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Greater Vancouver Marketto June 30/07
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Greater Vancouver Market (Contd)to June 30/07
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Calgaryto June 30/07
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Edmontonto June 30/07
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Ft. MacMurrayto June 30/07
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Saskatchewanto June 30/07
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Saskatchewan (contd)
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Winnipegto June 30/07
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Torontoto June 30/07
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Ottawato June 30/07
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Montreal2006 / 2007
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Outaouaisto June 30/07
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Halifaxto June 30/07
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20 Years from Now

• Benjamin Tal CIBC
  
• REM
  Source CREA
• Much Ado About Nothing Canadian House Prices
  
• Prices to double by 2026
• Cyclical forces to continue
• No structural changes
• 1st time buyers 68 market, declining by 167,000
  thorough 2026
• 45 54 largest declining group
• Offset by 55 74
• Less than 1/3 boomers moving
• Condo will not soften

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20 Years from Now (contd)

• Longterm interest rates neutralize
• Strong immigration

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Steve White

• Thought 2 Finish Consultants Ltd.

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Topics for Discussion

• The current business environment
• Employers reaction to the changing business
  environment and the rising housing crunch
• Emerging trends
• What could employers be doing to address this
  important need

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The Current Environment

• Housing prices soaring
• Significant variance between markets
• Continued pressure on cost containment
• Global talent squeeze
• Baby boomers leaving the market
• Gen X / Gen Y differing ideals and work ethics
• Increased barriers to mobility
• Increased scrutiny on successes

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The Ageful Workforce
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The Current Environment

• Vast majority of companies believe numbers of
  relocations will remain at or above current
  levels
• Mobility is a key part of business strategy
• For various reasons, companies looking to new
  types of relocation (eg. Shifts to shorter term
  assignments, commuters, using technology, etc.)
• Housing provisions remain traditional

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The Current Environment

• Employee populations covered include
• Permanent relocations
• Expatriate/International assignments
• Short term assignees
• New hires
• Immigrant workers
• A one size fits all policy cannot be effective

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What Employers are Doing

• The vast majority of employers continue to
  provide housing support although it differs for
  domestic and international moves
• Little has changed in housing provisions in
  recent years
• Guaranteed home sale
• Mobility allowances
• Repayment provisions upon failed assignment
• Housing allowances

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What Employers Are Doing

• With respect to international assignments, the
  vast majority of employers (97) provide some
  form of housing support while only 69 do so for
  domestic
• Most (51) include a housing norm or other
  employee contribution
• Some provide company paid housing, typically
  where tax or local conditions warrant
• 58 of companies pay the actual foreign housing
  costs while 19 provide an allowance that is not
  directly related to actual costs

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What Employers Are Doing

• The vast majority (90) of North American
  companies provide support for utilities costs,
  while less than 40 of European companies do
• 75 of employers are neutral with respect to home
  sale
• Less than 60 provide home retention support
• Close to 70 provide no support upon repatriation
• Most discourage purchase in the host location

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What Employers Are Doing

• With respect to short term assignees, close to
  63 of employers provide furnished accommodation,
  often selected by the employer
• Short term housing often differs from what the
  employee may have been accustomed to at home (eg.
  May be smaller, less equipped, selected for
  proximity to worksite, etc.)

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What Employers Are Doing

• Many organizations are cutting housing support
• 59 of employers report offering Guaranteed Home
  Sale (down from 74 in 2005)
• 47 of employers report offering Equity Loss
  Protection (down from 56 in 2005)
• 44 provide tax reimbursement (ie. Gross up),
  down from 53 in 2005

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What Does It All Mean

• The Ageful Workforce making it more difficult
  to get employees to move
• The Global War on Talent is real
• Mobility will be critical to business success
• Housing costs continue to escalate
• Little change in housing provisions
• If anything, housing provisions getting tighter
• Housing provisions may be a further barrier to
  mobility

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What Can Employers Do

• Strategically rethink your need for mobile
  employees
• Why
• Where
• What levels
• How important are they to the business
• How are they managed

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What Can Employers Do

• Consider additional flexibility to programs or
  provisions based on specific business and/or
  personal needs
• Lump sums
• Expand the application of policy
• Be careful of barriers such as repayment
  programs, restricted use of vendors, etc.
• Consider tiered policies to allow for differences
  in assignment type and/or employee needs

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What Can Employers Do

• Consider alternate assignment types, such as
• Short term, employee only
• Rotator
• Commuter
• Telecommuter
• Foreign hires
• Local hires

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What Can Employers Do

• Survey employees find out what currently works
  well and what doesnt
• Consider financial support (eg. Low interest
  loans, lump sums, equity buy back, etc.)
• Improve communication vehicles internal and
  external
• Measure what you want to manage, and report
  accordingly
• Other ?

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Last Thoughts

• The changing business environment, including
  changes in the employee demographics, dictates
  that ease of employee mobility will be
  increasingly more crucial to future business
  success.
• Businesses that understand what their strategic
  need for mobile talent is, address that need
  effectively, will strive. Those that dont, are
  likely to perish.

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Thank You

• Questions ?