Is it time to invest in Yellowknife’s condo market?
By Lucas on Jun 23, 2017
The Canada Mortgage and Housing Corporation (CMHC) recently released its Northern Housing Report, highlighting Whitehorse, Yellowknife, and Iqaluit. Looking at the figures, some speculators may be interested in investing in Yellowknife’s condo market!
Strong economic conditions in Yellowknife and Whitehorse will improve housing demand. In Iqaluit, the housing is primarily non-market, but construction of additional social housing should be kicking off in 2018.
Yellowknife’s resale market is strong, but while sales increased, the average price actually dropped. This is due to more apartment and mobile homes being sold. Also, two-bedroom rents declined, but are expected to stabilize this year.
“Buyers continue to purchase more condo units in Yellowknife while mobile home units have also become more popular,” says Tim Gensey, Market Analyst, CMHC. “These two compositional effects have led to a decline in overall average prices even as sales experienced strong growth.”
Though Yellowknife’s condo market is in the spotlight, there was a significant increase in single detached housing starts in 2016, going up by 41% year-over-year. Clearly there is a strong demand for both condos and new single detached homes.
Yellowknife, Northwest Territories
In Whitehorse, the market experienced growth across all types of housing. Even though new units were recently added to the rental inventory, vacancy rates declined. Last year, housing starts rebounded, nearing the five-year average, but the trend is expected to drop this year due to a lack of available land.
“As of March 2017, 91 rental apartment and row units were under construction in Whitehorse,” says Jeri Hitchings, Market Analyst, CMHC. “This represents the highest level of rental construction observed in over 10 years and will result in a substantial increase to the rental stock once these units are completed.”
In Iqaluit, there is a lack of housing due to limited land availability and high cost of building. The city needs at least 160 additional social housing units. Overall, the resale and private rental activity is quite low.
“Housing in Iqaluit is among the most expensive in Canada,” says Gensey. “Two-thirds of the Nunavut population cannot secure market housing without some sort of assistance from the government or their employer.”
Overall, the territories face challenges that we never have to worry about down here in southern Ontario. We think we have issues with a lack of land and infrastructure here in the Greater Toronto Area (GTA); imagine planning and building a new low-rise community in Whitehorse.
Then there’s the transportation of materials. The logistics and cost are enough to make new housing unaffordable and in short supply. It is interesting though that Yellowknife’s new low-rise and resale condo market is doing well.
Do you think we’ll start to see real estate investors from the GTA buying up properties in the north?
