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Are we heading towards a furniture crisis in Relocation?

September 11, 2012

About a week ago I saw the following article in the Globe and Mail and it made me think of a ripple effect on relocation.

http://www.theglobeandmail.com/report-on-business/as-canadian-condos-get-smaller-furniture-is-shrinking-to-fit/article4499968/

The article notes that condos in Canada are getting smaller, and that furniture is shrinking in order to fit inside those condos. Furniture retailers are creating smaller, multi-purpose furniture to meet the needs of consumers that simply don’t have the space to house traditional furniture.

Corporations are used to the fact that when a global assignee goes to China or Japan, or even the UK from North America, that the home country furniture is not likely to fit in the host country apartments. What has happened in those countries, and many like them, as a result of this, is that large parts of the apartment/condo marketplace include furnished accommodation (but non-serviced, about which I will explain in a minute). These are units that, not only come with the usual dishwasher, refrigerator, etc, but also couches, tables, chairs and beds. This is common, and in some instances (in some expat communities in Asia) is in fact the norm.

Not so in Canada. There is no expectation on the part of employers or employees that the furniture from a home country property in Indiana may not fit into a Toronto home. In addition, there is no non-serviced equivalent to the furnished property of China or Mumbai. There are temporary accommodations, and these are furnished, and are very nice. However, they always were meant to meet a different need: namely, short durations. They are far more expensive than their non-furnished equivalents. They come with regular servicing, and even have amenities that would be expected of hotels, rather than a run of the mill apartment rental.

We were recently assisting a company with a series of one year assignments and, in order to save the client a great deal of money, worked with them to assist their assignees with non-furnished (what I call traditional market) apartment rentals, and then coordinate the rental of furniture. In more than one instance, there was much discussion as to whether the furniture rental company’s available furniture would fit into the unit. It did, but everyone needed to be aware of the bedroom sizes, which were on the small side. When I read the Globe and Mail article it made me think of this situation.

North American mobility has gotten away with enough similarity between Canada and the United States to escape these types of problems. Canadian properties have always been smaller than their American peers, as are the homes, but they generally have been able to fit traditional furniture (just maybe not all of it).

So, who are the losers if American furniture stops fitting well into Canadian properties? The movers will move fewer goods, if employees choose to rent out their old property with their furniture (exacerbated by poor real estate markets). The assignees are also the losers, who would be better off if their home country furniture did fit. Corporations are the losers because their costs may go up. Who wins? Temporary accommodation companies, unless corporations do the extra work (and it is not minimal) to find traditional market rentals and then rent furniture separately.

I do not predict that the marketplace will solve this problem. The pool of global assignees and those who are permanently relocated to Canada, will never be big enough to seriously create a market need somewhere in between a serviced temporary accommodation facility and a traditional market non-furnished rental. Until then, companies and their mobile employees should not be talking to their movers first, without understanding what their housing budget “gets them” in the Canadian destination city, and the typical room sizes. These types of questions, which can be answered on preview trips can save a lot of headache, hassle, disappointment and money.

Posted on September 11, 2012 in blog

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