Yellowknife's housing market slows as economic slump looms on the horizon: CMHC
CMHC's annual report on Northern housing shows mixed outlook across the 3 territories
Yellowknife's housing market is cooling as the Northwest Territories' diamond mines approach the end of their lifespan and the territory's economic future increasingly looks bleak.
That assessment comes from the Canadian Mortgage and Housing Corporation (CMHC) in its latest annual report on housing in Canada's North. It suggests slowdowns in the mining industry will trickle down throughout the economy, affecting the housing market going forward.
"The downturn in the mining sector is likely to impact the housing market, as these products provide some support for the housing market in Yellowknife," the report states.
Signs of a slump were recorded in the data for last year, with fewer homes sold and fewer homes under construction.
Home sales in the N.W.T. capital dropped in 2018, with 240 homes sold last year, compared to 454 in 2017. Construction began on fewer homes as well, with 53 starts in 2018, compared to 65 in 2017.
Despite this, the average sale price of a home rose slightly to $448,721 in 2018, up from $408,290 in 2017. That's likely because most of the homes sold last year were in the upper price bracket, the report says.
The report did not have up-to-date numbers on core housing need in Yellowknife, but it did note that in 2016, Statistics Canada found 15.5 per cent of families live in unsuitable, unaffordable or inadequate housing, compared to the national average of 10.7 per cent.
Data suggests the situation is similar in the other territorial capitals, with both Whitehorse and Iqaluit showing a higher core need than the national average.
The housing market in Iqaluit remains dominated by non-market housing, which includes social housing and housing subsidized by government and private businesses.
Nearly 25 per cent of rental homes are social housing rented out by the Nunavut Housing Corporation, while another 39 per cent are staff housing for territorial and federal government employees.
Housing in Iqaluit continues to be "among the most expensive to provide in Canada," the report states, with more than 60 per cent of Nunavummiut unable to afford a place to live without some sort of assistance from their employer or the government.
The Nunavut government is spending $34 million this year on housing in the territory, including $12 million for emergency shelters, the report states, with 20 new public housing units expected for Iqaluit in 2019-2020.
Demand is expected to continue to put pressure on the need for housing as high gold prices and investment in new and existing mining projects at Meadowbank and Hope Bay continue.
House prices in Whitehorse rose slightly in 2018, with most indicators showing it was a seller's market, with rising prices and shrinking housing stock. Prices for 2019 are expected to rise again, with the price range for a home between $422,000 and $452,000.
The rental market, meanwhile continues to be tight, sitting at 2.4 per cent in October 2018, which was the lowest vacancy rate in the past four years.
The CMHC report suggests that the population of young adults will keep the rental demand stable even as the population ages.