Yellowknife (July 14/04) - Strong demand, helped out by the diamond industry, is part of the reason why home values have been rising in Yellowknife, according to a Yellowknife real estate agent.

"I think it's a lack of supply and a healthy demand," said James Clark, owner/agent for Homelife Real Estate.

"That's why you see so many homes for sale by the owners," Clark said in reference to the tight market.

Clark estimates about half of the home buyers he deals with are in some way affiliated with the diamond industry.

"Between 50 and 60 per cent of our clients are diamond oriented," Clark said.

The other half are Yellowknifers looking to upgrade or downgrade their living accommodations.

Five years ago, prices in the housing market dropped after the GNWT stopped giving out $10,000 towards downpayments on new homes, Clark said.

Then four years ago, when the diamond industry was just getting going, smaller homes were the most popular, Clark said.

Clark doesn't necessarily think the market has grown, but people buying are "in a different category."

In the last few months, Clark says he hasn't been able to keep larger properties in stock. Overall, the market is healthy.

"The last few years have been booming pretty good. We can hardly hold anything now," he says.

Demand has increased substantially in all categories. First-time home buyers might be in for a surprise.

Homes that used to cost under $100,000 four years ago now regularly sell for over $150,000, Clark says.

The diamond boom has had a different effect on the personal rental market. An examination of Yellowknifer classified ads from June 2000 lists two-bedroom apartments starting at $1,150 per month.

By 2004, the rental rate for most downtown two bedroom apartments is at or above $1,200 per month.

Yellowknifer classified ads from 1994 to 2004 show the number of rental properties decreasing between 2000 and 2003, and starting to rebound during 2004.