by Mark Sproxton
Northern News Services

NNSL (Jan 15/97) - The operational phase of BHP's diamond mine should translate into a growing home sales market, says Canada Mortgage and Housing Corporation's annual housing market report.

"We're anticipating things to really pick up in '98," said Ed Suzuki, a market analyst from Yellowknife now based in Edmonton. "When the operation of the mine starts, that's when you'll see employment increasing."

As for 1997, the corporation forecasts a "balanced" housing market.

The price of resale homes and the number of new houses built will increase, while the resale market will also improve, the report states.

At the end of last November, the average sale price for a home was $144,355, up eight per cent from 1995.

This year the cost of existing bungalows and manufactured homes is expected to rise as they are the most affordable homes on the market, Suzuki said.

"On the resale side you would think the prices should be coming down but they seem to maintain their price by people listing them longer," said Suzuki.

"Also, there is a limited supply. People tend to be pickier now."

Manufactured homes showed the largest price increase in 1996 with costs growing nine per cent.

Condos and two-storey homes, on the other hand, saw prices drop an average of 17 and three per cent, respectively.

The continued job loss and uncertainty created by government cuts and the promise of economic spinoffs from the diamond mine will have the largest influences on housing sales in the future, Suzuki said.

This year the corporation expects the number of employed in Yellowknife to grow by less than one per cent while the population will increase by two per cent.

The corporation predicts a moderate improvement in consumer confidence from work on BHP's diamond mine will push the number of new housing starts past last year's total of 75.

For 1997, housing starts should reach 80 units with the majority of homes geared to the $130,000-$150,000 range.

The 1996 housing start total was down 52 per cent from 1995. Job reductions and uncertainty stifled demand for new housing in the city.

On the resale market, about 270 homes are expected to be sold this year, up from 255 in 1996.

The sales totals for 1996 were 7.6 per cent higher than in 1995.

Last July, the number of new listings reached an all-time high, with 40 homes being put on the market, the report states.

CMHC conducts an annual year-end survey of the Yellowknife housing market.