Doug Ashbury
Northern News Services

NNSL (Dec 23/98) - The new home ownership program has turned out to be a real shot in the arm for the city's real estate market.

Rod Stirling, managing partner with real estate company Coldwell Banker, said the program, launched Dec. 1, has sparked sales of many homes in Yellowknife.

"It's about 10 times normal," Stirling said.

The new home ownership program, which expires March 31, provides $10,000 grant to first-time home buyers in the Western NWT and $15,000 in the East.

The NWT Housing Corp., which administers the program, said 87 applications have been approved as of Dec. 18., most of them in the West.

Stirling estimates there are about 120 homes for sale. He added when the program was announced, there were about 160 properties on the market.

"There was a growing inventory of available properties. Certainly, it has been a buyers' market."

Housing prices are off at least 10 per cent from 1994.

Stirling also said he has not seen the program drive house prices up. He also does not anticipate prices will fall further.

The sales are spread across the city's three real estate companies, Coldwell Banker, Century 21 Home and Investment Centre Ltd. and Homelife Sunrise Real Estate.

Stirling adds that realters are not the only businesses to benefit from the program. Appraisal and legal firms as well as banks get a piece of the action as well.

And the program comes at the market's slowest time.

"December, January and February are usually slow months. When it's cold, dark and minus 40, people are not traditionally looking to move."

For those making the decision to own their first home, the $10,000 grant covers the downpayment and closing costs of about $2,500.

Canada Mortgage and Housing Corp. provides insured mortgages based on five per cent down payment up to a maximum purchase price of $175,000 for homes in the NWT.

For homes over $175,000, CMHC requires 10 per cent down.

Stirling said he is seeing a lot of first-time home buyers making offers on "entry-level" homes.

Based on a mortgage of about $170,000, with a 6.5 per cent interest rate amortized over 25 years, the monthly mortgage would be about $1,150.

"A lot of people not in a position to buy, are now in a position to go ahead and get a mortgage," Willy Chidowe, Century 21 Home and Investment Centre owner, said.

The objective of the program is to make home ownership more affordable in the NWT targeting:

* Present NWT residents who lack the savings required to make a down payment.

* Businesses to relocate their employees and their families to the North permanently.

* Individuals or families who might live elsewhere in the NWT to move to communities for employment or training opportunities.

The program has also accelerated the process for people who would have bought six months down the road, Chidowe also said.

Chidowe said his phone is ringing off the hook.

"We're constantly showing houses. The difference between November and December is night and day," he said.

"It's great."

James Clark, owner of Homelife, said home sellers have picked up on the program as well.

Clark said he has noticed home owners are now more apt to hold out for the asking price. And for new homes coming on the market, the program has in some cases, driven prices up, he said.

Clark also said because buyers may not face any risk -- they may not need to put any cash up for the downpayment -- they may back out.

Overall, Clark said the program is "tremendous."

He credited much of the program's success because it is so simple to understand.

For the remainder of the 1998-99 fiscal year, clients will be able to buy existing homes only under the program. Trailers and modular homes that have been owner-occupied for at least a year prior to the sale and which bear the Canadian Standards Association Z240 certification label are also eligible.

Existing condominiums are also eligible.

Units in a co-operative housing project are not eligible.

If the program is extended past March 31, new homes, including log homes, will be eligible for financing.