Doug Ashbury
Northern News Services

NNSL (Jan 15/99) - The NWT Housing Corp.'s $10,000 home buyer grant program has benefited more than just real estate agents, according to Yellowknife Real Estate Association President Ken Pearman.

The program, which gives new home buyers money to cover the down payment and closing costs, has added a spark to the city's real estate sector.

Appraisers, building supply companies, furniture stores and trades people have benefited from the program.

Ultimately, the program is good for the city because "people who own their own home tend to stay longer and spend more time in the community," Pearman said.

And that should mean a more stable population down the road, he added.

Pearman said the city's real estate market has, because of the $10,000 grant program, become more "balanced."

Up until November of 1998, "there was an oversupply of homes" in any given sector of the market, he said. Post-November, Pearman said the market had an "adequate" supply of homes in each price range.

Most of the recent home sales in Yellowknife have been properties in the $140,000 to $175,000 range.

Since the grant program, the number of homes for sale has dropped to about 175 from about 300, he said.

As well as the 175 houses currently on the market, there are about 75 houses that are being rented out that the owners would like to sell.

Pearman, who has been in the real estate market in Yellowknife for 15 years, said last year was the worst he has seen the market get.

In many cases homes listed in the spring of 1998 were still on the market late in the year.

"We've seen sale times of 230 days (when) normal would be 90 days. The timing of the (grant) program was excellent."

But despite the boost generated by the grant program, the city's real estate sector is apt to face continued challenges, Pearman adds.

The future of the market will largely depend on the future of the city itself, he suggested.

Variables like what will happen after division, with the Con mine strike, what is the future for Giant mine, how many diamond mines will there be in the NWT, and what will be the extent of value-added jobs in the diamond sector, will all be linked to the real estate market's performance in the coming years, Pearman said.

Another factor is doubt.

People may often hesitate to buy a home in Yellowknife -- not only because of the prices but also because of uncertainty about the health of the city's economy.

Pearman said people who are interested in looking at buying a home do pose the question: Will I be able to sell the property in the future?

To this Pearman said there is that risk but he also pointed to the well-known personal finances book and said, "a home is the cornerstone of personal wealth."

Pearman also said when people pose this question he asks them how long they plan to stay in Yellowknife. Most people can see where they will be in two or three years.

And if that place is Yellowknife, then they are looking at roughly $24,000 to $36,000 in rent based on $1,000 a month.

With a $150,000-home, less the $10,000 grant, the mortgage would be $982 a month plus about $180 in taxes (based on 6.5 per cent interest on a five-year term amortized over 25 years).

For a $175,000-home, less the $10,000, corresponding monthly mortgage and taxes would be $1,150 and $200. A $125,000-home, less the $10,000, would mean mortgage and tax of $807 and $160 respectively, Pearman said.