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SOMBA K'E/YELLOWKNIFE
The vacancy rate in the Yellowknife rental market relaxed a bit this year while the average rental cost increased.

Canadian rental markets in fall 2012 The following table includes the average apartment vacancy rate and rent per month for a two-bedroom apartment as of October 2012. Vacancy / Rent Yellowknife: 3.6 per cent - $1,641 Edmonton: 1.7 per cent - $1,071 Calgary: 1.3 per cent - $1,150 Halifax: 3.0 per cent - $954 Saskatoon: 2.6 per cent - $1,002 Canada: 2.6 per cent - $901 Mortgage versus rent Average rent for a two-bedroom apartment in Yellowknife - $1,641 The monthly carrying cost for a $270,000 condo based on a 10 per cent down payment, 25-year amortization, and the conventional mortgage rate - $1,338 Source: Canada Mortgage and Housing Corporation

A Canadian Mortgage and Housing Corporation (CMHC) report on the Yellowknife rental market stated the vacancy rate increased to 3.6 per cent in October 2012 from 1.6 per cent in October 2011.

It also stated the average rent for a two-bedroom apartment rose 4.8 per cent this year to $1,641 as of this past October.

The trend is not entirely surprising, according to Regine Durand, a market analyst for the corporation.

"Typically, we have two key factors behind this," said Durand. "The most important one is ... the movement to home ownership."

Durand said 250 sales were recorded in Yellowknife over the first nine months of 2012 and most were from the sale of condo units.

Anecdotal accounts from city realtors also informed the CMHC that many condo sales were to first-time homeowners who previously were renters in the city, she said.

The second factor has to do with the 730 people who left the NWT for other provinces in the first half of this year, Durand said, adding that, since Yellowknife accounts for a large portion of the territory's population, it is likely that many were from the city and that some were renters.

David Stewart, president of the NWT Housing Corporation, said rising rent alongside increased vacancy rates in the rental market isn't surprising since utility costs and the constant cost of maintenance generally increase for private landlords over time.

Even with more than 400 units hitting the home-ownership market over the next two years, few changes are expected to Yellowknife's rental market.

"You'd expect as the supply goes up, as more units are constructed, that would put additional pressure on the rental market in terms of vacancies and competitiveness, and that could have an impact on price over time," said Stewart.

"That said, Yellowknife has traditionally had quite low vacancy rates and it is also a community where things tend to move in cycles ... There's often a fairly quick turn around in the number of vacant units that are out there so I don't expect that to change in the near term.

"We are still very tied to our resource industries. As projects develop, you tend to see the population also increases and then when there aren't projects, there tends to be more limited population growth."

Jeff Humble, director of planning and lands for the City of Yellowknife, stated in an e-mail to Yellowknifer the city's general plan predicts a demand for approximately 140 additional dwelling units per year due to an expected 1.49 per cent population increase per year.

"Based on this, the market absorption rate of the additional units coming on the market is approximately in line with the general plan's long-term trend," stated Humble.

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