The Yellowknife housing market has stayed hot since May, but realtors are expecting a winter drop-off.
According to Adrian Bell, president of the NWT Association of Realtors, the housing market in Yellowknife picked-up in May and the trend has continued since.
“The thing about a town like Yellowknife is there’s a lot of people who have stable employment, there’s a high percentage of government workers,” said Bell.
Transactions for houses are up to 279 compared with the total reached by October 28 last year of 258. Average house prices are up from $386,777 to just over $410,000.
The time a house is on the market is down by nearly a fifth, from 99 days on average last year to an average 81-day stay on the market this year.
One reason houses are selling quicker and for more money, according to Bell, is people are spending more time than before in their house due to the pandemic, and this can make people want to improve their living space.
Lumber mills have also been selling out, as people look to spend on home improvements, Bell said.
He added that with travel being restricted and restaurants being closed for large portions of time, it may have been easier for some people to save for a deposit on a home.
Lack of supply
While more people are buying homes, listings are not increasing. Bell, who is owner of Century 21 Prospect Realty, said he has 40 listings currently in Yellowknife, which is about half as many as he had this time last year.
Bell said there are a number of factors fuelling Yellowknife’s low housing supply, but said the true cause is “kind of a mystery.”
“There’s not a lot of land available to build on in Yellowknife,” he said. “I think there’s a lot of people who are concerned about the current situation that this may not be a good time to list, but the opposite is true.”
According to the Canada Mortgage and Housing Corporation’s Northern Housing Report, a decrease in first-time homebuyers, high costs of construction and land availability issues resulted in a decline in housing starts.
“Things are kind of in limbo,” said Bell. “The city has a hard time getting land from the GNWT. That’s in large part due to the fact the land-claim process is pretty close to being completed, and that picture needs to be resolved before talks of turning new residential land over to the city.”
Travel restrictions could mean people are unwilling to leave Yellowknife, and people who have secure jobs are “probably staying put,” said Bell.
“Buyers are motivated, but sellers are maybe thinking next year will be better,” he added.
Affordability an issue
While those with secure jobs may be looking to invest in real estate, there’s also an increase in people struggling to find affordable housing.
CMHC’s Northern Housing report cited the 2019 NWT Community Survey released by the NWT Bureau of Statistics, found that more than a fifth 3,182 of the 14,760 dwellings in the N.W.T. were considered not affordable — CMHC defines affordable as being able to cover housing costs with 30 per cent of a person’s income.
Over a 10-year period from 2009 to 2019, the proportion of houses with affordability issues more than doubled in Yellowknife, from 14% in 2009 to 29% in 2019.
Affordability impacts not just buyers but renters as well, according to Christian Arkilley, an analyst with CMHC.
The vacancy rate in Yellowknife dropped from 5.2 per cent in 2018 to 4.2 per cent in 2019, showing a surge in demand for rental units.
“Having a vacancy rate of 4.2 per cent shows there are still units available to rent,” said Arkilley. “But the only problem with people occupying those units is their ability to afford them.”
The average rent for two-bedroom apartment units was $1,744 in 2019, an increase of 2.9 per cent compared to the previous year. That’s more than $500 more expensive than in Whitehorse.