Rental market tightening
Vacancy rate falls, corporation says
Yellowknife (Jan 12/00) - An important economic indicator for Yellowknife suggests the economy is on the upswing.
The city's apartment vacancy rate is declining, according to Canada Mortgage and Housing Corporation.
In an annual rental market report completed last October, the corporation found 85 vacant, privately-owned apartments. That's down significantly from the 135 vacancies a year earlier.
The vacancy rate was 5.7 per cent, based on the corporation's October 1999 survey of 1,498 rental units.
That's down from nine per cent in October 1998, when 1,497 apartments were included in the survey.
The biggest drop in availability was for one-bedroom units where the rate dropped to 5.1 per cent in October from 10.7 per cent a year earlier.
It should be noted that last fall Lauchlin MacDonald, with Yk-based real estate appraiser and property assessment company Stewart Weir MacDonald Ltd., surveyed owners of 1,750 Yk apartments and found the vacancy rate to be 11.6 per cent.
"The improvements came despite a weakened labour market (Con mine workers were on strike for 11 months to May and about 250 jobs were cut at Giant mine) and the NWT Home Ownership program that boosted demand for ownership units earlier this year," the corporation said in its Fast Fax publication.
Under the home-ownership program, the GNWT gave homebuyers a $10,000 grant. Surprisingly, the program did not drive apartment vacancies up. In fact, a corporation survey done last June -- the grant program ended May 31 -- showed apartment vacancies fell to 7.1 per cent from nine per cent.
The decline could suggest some homeowners saw the grant program as an opportunity to sell their homes, while others, faced with job losses, sold homes and rented apartments, said Sandra Turner, the corporation's corporate representative in Yk.
As for rent, monthly costs fell for all apartment groups except bachelors.
The average rent for a one-bedroom apartment last October was $822, down from $838 a year earlier. Average rental rates for one- and two-bedroom apartments have been declining for four years, according to corporation figures.
Steve Vallilee, president of the Yk Real Estate Board, says a reduction in new listings is another indicator of the city's recovering economy.
Vallilee said the number of houses listed for sale over the past two to three months has slowed. Only two to four houses per week are now being listed, compared to eight to 10 in prior months.
A jump in listings would pour cold water on the significance of the apartment availability numbers.
Vallilee said the diamond company presence in Yellowknife has played a role in the housing market.
"Yellowknife has shown itself to be very resilient. So much has happened, with government (downsizing) and gold price declining and the Giant situation, we've gone through some tough times," he said.
"I think certainly the worst is over."
Dave McCann, general manager of Mackenzie Management, said vacancy rates across the group's 411 units in Yk has gone down over the past year, but only slightly.
Monday, he said Mackenzie's vacancy rate was at about nine per cent, down from about 10.5 per cent a year ago.
"It's stabilized (but) it was weak when we had the $10,000 grant program," he said.
McCann added that Mackenzie is now seeing vacancies in its two-bedroom apartments. Historically, this has not been the case, he said. Often, to lower costs, people are sharing a one-bedroom unit, he said.