Marketers often get a bad name “you make us buy what we don’t want to”.
As a 25 year professional in the field, that isn’t reality. And often the datapoints used to “prove” this point of view is flawed. An excellent example comes from Business Week about the Vancouver market bubble. Business Week takes the view that Vancouver is just a late comer to the housing bubble. It lays out the differences in the Canadian and US marketplaces, shows why Canada’s housing market has been more tame and how the banks here are more regulated. But in the end, the writers clearly have the belief that the Vancouver market is headed for a fall and will come off a current bubble.
Now the marketing learning: while I think this housing market is ridiculous and overpriced, reading an American business magazine analyze a non-American marketplace from an American point of view is instructive. The learning for marketers: make sure you know and understand your reference point, and make sure that that reference point does not blind you to other information and data.
Here is the application of that learning to the Business Week article: the authors wrote about this market as if the market was in the US. Vancouver is not in the US. In fact they missed what I believe are some of the key metrics. Let’s take a look:
- Vancouver housing isn’t constrained by Canadian bank policies and funds. A fair portion of Vancouver real estate purchases are funded offshore or self-funded. Bank policy isn’t a good metric.
- In Canada mortgages are not government subsidized. Therefore, most housing is based on where and what you’d like to live in balanced against what you can afford. It means the underlying assumptions about this market are flawed.
- Business Week never mentions location. Manhattan is about 45 minutes away – in good traffic – from an international airport. Downtown Vancouver is 25 minutes away on a brand new transit system that costs you $3.25 CAD. Manhattan is halfway around the world from Asia, where a lot of folks need to do business. Vancouver is the first North American City to Asia – its a 10 hour non-stop to Narita as an example, which gets you anyplace you’d like to go in Asia.
- Business Week messes up its understanding of truly global cities. Vancouver is always in the top 10 liveable cities globally – I even wrote about this in February myself. Global great cities have global marketplaces to find customers from.
- Safety matters and wasn’t mentioned. In early June Vancouver experienced its 3rd homicide. I’ll refrain from comparing that to Manhattan.
- Vancouver is an insurance policy. This one is not from publications it is from observation. For all of the reasons noted above, Vancouver is a safe haven for housing for wealthy Chinese, Taiwanese, Hong Kong, Thai, Korean, Singaporean, and many other countries. Canada has immigration policies that favor smart wealthy immigrants from all countries. All of the attributes above matter as well. It makes this city virtually unique in the world as the “if things get crazy in my home country I’ll just move here” place.
Point six alone makes this land, these policies, this location, and this government combination priceless. The view, the weather, the lack of land? They are interesting factors, but not the major ones. Vancouver is a place to own property because it is the place you want to be, amongst those nice, conservative, realistic, safe Canadians, if a global meltdown occurs.
Business Week got it wrong, and teaches us what really matters as a marketer: make sure you understand what really drives a marketplace.
A shout out to Sean of Brandiosity for asking me “what do you think of this Business Week article”.
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