So what does the housing market in Yellowknife look like right now?
Yellowknifer spoke with Rod Stirling, broker and owner of Coldwell Banker Northern Bestsellers; Kim Knutson, owner and broker for RE/MAX North of 60 Realty; and Adrian Bell, owner and broker for Century 21 Prospect Realty, to get their opinions.
Starting with the price of homes, they each said that the average sale price this year was increased by about one or two per cent compared to last year.
Stirling highlighted the difference compared to many communities in the south, which see dramatic spikes in their respective housing markets.
Each of the three realtors provided statistics comparing the number of listings that resulted in a sale in 2022 to 2023. Last year from Jan. 1 to May 29, 117 properties were sold but in the same time span this year, only 91 were sold. “Looks like a slower start but a strong finish for the year at this point,” said Stirling. “I think that this is largely attributable to the dramatic mortgage rate increases at the Bank Of Canada as it tries to curb inflation.”
Stirling and Knutson added that properties priced in the middle range that are well cared for are still in high demand and sell quickly. The quick sales of those properties seem to be the exception. Stirling and Bell both highlighted that sales are talking longer because buyers are generally more cautious.
“Buyers during Covid times were lulled into thinking that the historical low mortgage rates would continue and this just wasn’t the case,” said Stirling. “Those rates were just not sustainable.”
Knutson said that the market is currently active and she began to notice things picking up in March.
“We are still seeing multiple offers on properties but nothing compared to the last two years where multiple offers was the norm,” she said.
Why the market is the way it is
Each of the three realtors said what they think caused the housing market to be in its current state. According to Stirling, the lack of housing options locally is one cause.
“There seems to be a perfect storm right now affecting the YK market both for rentals and re-sales,” he said. “Highest wages more or less in Canada, virtually no available rentals, many people wanting to move to town, no available land to build on and a lack of encouragement and helpfulness on the part of the city for anyone that does want to provide some sort of relief to our housing woes by adding secondary suites, mini or alley way homes, new builds or work camps for seasonal workers. “There here just seems to be too much red tape to move forward with more housing options and no land to do it on.
“This creates a frustration level for those that have found good employment but can’t find suitable housing. Knutson said that interest rates were one of the main causes.
“Interest rates have had an impact on the higher priced homes making them much more difficult to sell as the pool of potential buyers has gotten smaller as a result,” she said. “Like much of Canada we are facing a shortage of housing and until that improves prices will continue to increase.”
Bell agreed that the national market has been impacted by rising interest rates and also provided a similar observation to Stirling.
“The main local pressure, which has kept competition pretty fierce for “stick-built” homes, is that there is no residential land for sale,” Bell said. “New home construction is an important ‘pressure-relief valve’ on resale market prices, but it doesn’t exist here in a statistically relevant sense.”
The future, short and long term
Knutson and Bell said that the market this summer will be stable and Stirling said that it would be busy. “If we were farmers this would be harvest time,” said Stirling.
Knutson said that real estate quiets down once kids get out of school, but provided additional speculation for this year.
“This year might be slightly more active as I am told the military is staggering their postings so we may see more summer house hunting trips than usual,” she said.
Bell said that there’s about three weeks left in the peak season, then sales will start to taper off and more dramatically so in the fall.
Each of the realtors made a speculation about where they think the housing market will be in five years. Stirling said it was difficult to say but he had a positive outlook for the future. Two of the main events he highlighted as important factors was the eventual closure of the Diavik diamond mine and the remediation phase. He also said he hoped other projects such as mining rare earths will provide employment for people who will be laid off at Diavik.
“These other potential projects coupled with the large remediation project at the old Giant Mine site should keep our economy strong for years to come,” he said. “My best guess is that it will remain stable with healthy demand in both the rental and re-sale markets with the pendulum starting to swing back to a more balanced market supply wise for buyers but still a tight market for renters given that there is really only a couple developers active with only a few rental projects currently under construction that will not satisfy the current market demand.”
Knutson said that she thinks the local housing market will remain stable and continue to be a good place to invest money because it is “somewhat insulated from economic factors.” Bell said that 2024 will likely be similar to this year but when Diavik closes, listings will increase and prices will be slightly lower.
“I think our real estate values will stay pretty stable, and once the market has absorbed the extra mine-closure-related listings, I think we’ll return to our typical 2 per cent to 4 per cent appreciation per year,” he said. “We’re very lucky to have so much public sector employment. It’s the single biggest factor affecting our market over the long term.”