Andy Yan says local employment, interest rates, and pent-up demand may be driving a high turnover in homes in Langley. (SFU/special to the Langley Advance Times)

Andy Yan says local employment, interest rates, and pent-up demand may be driving a high turnover in homes in Langley. (SFU/special to the Langley Advance Times)

SFU housing expert explains Lower Mainland’s surprising real estate sales numbers

Why are housing sales in Langley, and the region, still so high despite a pandemic and recession?

Houses in Langley are selling at a near-record pace, with sharp increases since the end of near-lockdown conditions in March and April, but why is that?

For years, the explanation for the steady rise in prices of homes in Metro Vancouver was twofold – the region had low unemployment, and steady population growth, largely due to immigration.

Neither of those factors are now true, with the coronavirus pandemic driving up unemployment while immigration has ground to a halt amid travel restrictions.

We asked Andy Yan, the director of Simon Fraser University’s city program, about why housing sales in Langley and across the region have gone up and stayed high through the late spring and the whole summer.

“It’s one of those really interesting things to note about our housing market,” said Yan.

He said there are so many factors involved in the local housing market that determining causes can be like “3-D chess,” but there are a few factors that stand out.

READ MORE: Langley housing sales shoot up in August

First, he pointed to the fact that some sectors of employment were affected much more by COVID-19.

“It’s people who were more in service, lower paid types of industries,” Yan noted.

Those in higher-paid jobs, whether in construction and trades or white collar office work, kept right on working through the early phases of the pandemic, though some switched to working from home.

The people who were hurt the worst economically were the least likely to be able to afford a house in the first place.

Pent-up demand among those who couldn’t buy a home during March and April also likely plays some role.

Then there’s the changes to the work lives of those who do have the money to buy a new home – some of them are considering working from home long term.

“They’re not really commuting as much,” Yan said.

That can affect outer suburban communities like Langley in particular, making neighbourhoods here more attractive.

However, as economic impacts of the coronavirus pandemic and the recession start creeping up the income chain, more affluent workers could be affected, Yan said. It’s something to watch for, he said.

Another major factor was rock-bottom interest rates. Although rates had been historically low even before the pandemic, they dropped down even further as the Bank of Canada slashed the prime lending rate in March.

For those ready to buy, that made a mortgage more affordable, noted Yan.

So, can he say what might happen in the months to come in local real estate markets?

“I always tell people I’m very good at predicting the past,” Yan joked.

Factors that could impact housing sales and prices include the possibility of a second lockdown if there’s a major “second wave” of coronavirus in the fall, Yan said.

He also said it depends what happens in some employment sectors.

Some businesses that were initially hit hard have pivoted to new ways of doing business and are already recovering.

Yan also suggested that there is a “floor” underlying the price of housing in Langley and its neighbours because our local economies may, in some ways, be more resilient than that of downtown Vancouver.

For example, the loss of cruise ship business for an entire season will hit many businesses in downtown Vancouver hard. But Langley’s economy relies on other sectors, such as light manufacturing, warehousing, and agriculture, which were not as severely affected.

The rise of “sub-regional economies” in places like Langley, Surrey, and Abbotsford may mean there’s a minimum base housing demand here that doesn’t depend on what’s happening in Vancouver, Yan said.

.

_________________________________

Is there more to this story?

Email: news@langleyadvancetimes.com

Like us on Facebook or follow us on Twitter

_________________________________

CoronavirusHousingLangleyReal estate

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

RCMP are looking for “an unknown man who wrapped his arms around” a female youth in Clayton Feb. 26. (Black Press file photo)
Youth assaulted by unknown man in Cloverdale

Mounties looking for ‘tall and thin’ Caucasian man in his 40’s with short dark brown hair

Framed photos of Travis Selje and other items fill the top of a dresser in his bedroom. (Photo: Tom Zillich)
Crown says defence case epilepsy caused fatal Surrey crash fails on balance of probabilities

‘She very clearly had some form of control over that vehicle,’ Crown argues

Alex Browne photo The felling of two mature Douglas Fir ‘eagle trees’ on Oxford Street, just south of Prospect Avenue, in June of 2019, prompted a review of tree management bylaws and policies now before White Rock council. The trees were felled on instructions from City of White Rock staff, who said the work was necessary because they had become hazardous. (File photo)
City of White Rock mulls ‘tree protection’ bylaw

More stringent measures needed to protect canopy – councillor

teeaser
Surrey TEDx talks move online with ‘fast-paced’ event that’s free to watch March 27

Last year’s TEDxBearCreekPark attracted 900 spectators to Bell theatre

Dr. Bonnie Henry leaves the podium after talking about the next steps in B.C.’s COVID-19 Immunization Plan during a press conference at Legislature in Victoria, B.C., on Friday, January 22, 2021. THE CANADIAN PRESS/Chad Hipolito
COVID: 589 new cases in B.C., and 7 new deaths

No new outbreaks being reported Feb. 26

Passengers aboard Komagata Maru in Vancouver’s Burrard Inlet, 1914 - Library and Archives Canada image
Abbotsford council is asked to rename street in memory of Komagata Maru victims

Most of 376 the passengers aboard ship were denied entry into Canada in 1914

The first of 11 Dash 8 Q400 aircraft's have arrived in Abbotsford. Conair Group Inc. will soon transform them into firefighting airtankers. (Submitted)
Abbotsford’s Conair begins airtanker transformation

Aerial firefighting company creating Q400AT airtanker in advance of local forest fire season

The Canada Revenue Agency says there were 32 tax fraud convictions across the country between April 2019 and March 2020. (Pixabay)
Vancouver man sentenced to 29 months, fined $645K for tax evasion, forgery

Michael Sholz reportedly forged documents to support ineligible tax credits linked to homeownership

Then-Liberal leader Andrew Wilkinson looks on as MLA Shirley Bond answers questions during a press conference at Legislature in Victoria. (Chad Hipolito / THE CANADIAN PRESS)
B.C. Liberal party to choose next leader in February 2022

Candidates have until Nov. 30 to declare whether they are running

After nearly 10 months of investigations, Mounties have made an arrest in the tripping of an elderly woman in Burnaby this past April. (RCMP handout)
VIDEO: Mounties charge suspect for tripping elderly woman near Metrotown in April

32-year-old Hayun Song is accused of causing bodily harm to an 84-year-old using her walker

British Columbia provincial health officer Dr. Bonnie Henry arrives to view the Murals of Gratitude exhibition in Vancouver, on Friday, July 3, 2020. THE CANADIAN PRESS/Darryl Dyck
Death threats mount against Dr. Bonnie Henry, sparking condemnation from Horgan, Dix

Henry has become a staple on televisions in homes across British Columbia since January 2020

Bryan Adams with his mom, Jane Adams Clark, at Lions Gate Hospital. (Bryan Adams)
Bryan Adams gives shout out to North Shore hospital

The singer’s mom was in Lions Gate Hospital for care

Shoppers will be able to get their hands on signed bottles of Ryan Reynolds’ new gin at B.C. liquor stores this summer. (Twitter/Ryan Reynolds)
Ryan Reynold’s Aviation Gin autographed and coming to B.C. stores

This summer 100 bottles will be available to the public for purchase across five B.C. liquor stores

Most Read