Sydney Selvon
Northern News Services

Yellowknife (Jan 04/06) - The rental market in Yellowknife has eased up lately, but that could soon change.

The overall apartment vacancy rate increased from three per cent in October 2004 to 3.3 per cent in October 2005. However, the increased availability isn't expected to last long, say officials of the Canada Mortgage and Housing Corporation (CMHC).

"It's still a healthy market in Yellowknife," said Sandra Turner, a CMHC representative in Yellowknife.

Vacancy for three-bedroom apartments sharply increased from one per cent in 2004 to 6.4 per cent in 2005. However, the bachelor apartment vacancy rate decreased from 9.1 per cent in 2004 to 3.6 per cent in 2005, she said.

Vacancies for two-bedroom units rose from 1.8 per cent to 2.4 per cent, but remained below the overall average of 3.3 per cent.

"It's quite interesting dynamics," Turner said.

She researched the Yellowknife housing market with Richard Goatcher, a market analyst for the Prairies and Territories.

"Yellowknife is experiencing strong economic growth with such developments as the diamond mine at Snap Lake and other projects that are driving the economy," said Goatcher, who is based in Calgary.

Their research showed there were 29 vacant apartments in October 2003, 54 during the same month in 2004 and 62 in October 2005. Goatcher said this increase is due to the recent construction of new apartment complexes and he expects the market will absorb the vacancies.

Darren Pelley of Northern Property Real Estate Investment Trust (NPREIT), which owns 900 units in Yellowknife, wasn't so sure that the CMHC has it right.

"CMHC's 3.3 per cent (vacancy) figure is an average," said Pelley. "In our case, the figure is somewhat higher."

He said Northern Property is working hard to fill empty units, spending close to $1 million renovating its Sandstone apartments recently.

In total, the CMHC report indicates new apartments in the city increased by 4.1 per cent between October 2004 and October 2005.

In the townhouse sector there was a 13 per cent increase, with 73 additional units.

This has lifted the combined apartment and townhouse vacancy rate from 2.7 per cent to 4.6 per cent in the 12 months preceding October 2005.

"The market usually tightens after some time, with construction slowing down, and then the cycle begins again," Goatcher said.

"Builders want to stay ahead of their competitors. When the market tightens, they put more units on the market, each one wanting to be the first to do so, and the supply again exceeds demand. This is what's going to happen in Yellowknife," he said.