Guy Quenneville
Northern News Services
Published Wednesday, December 19, 2007

YELLOWKNIFE - It's only a matter of time until apartment rents in Yellowknife go up, according to the Canada Mortgage and Housing Corporation (CMHC).

The corporation's Fall Rental Market Survey, released last week, indicates the apartment vacancy rate in Yellowknife has gone down considerably since last year.

Jennifer Eggenberger, landlord of several residential buildings in Yellowknife, hands a monthly rent receipt to her tenant, Jason Melanson, while working her day job at JJ Hobbies. Eggenberger expects she will increase her rents - but not for the same reasons cited by a recent survey by the Canada Mortgage and Housing Corporation. - Guy Quenneville/NNSL photo

The rate shrunk to 1.2 per cent this year from 3.3 percent in 2006 - a steep enough decrease to spur rent hikes, according to Richard Goatcher, a senior market analyst with the housing corporation.

"The thing that surprised us the most is that vacancies have moved down, but that rents haven't moved up," said Goatcher.

"I would expect it will happen soon."

But it wouldn't be a significant increase, he predicted.

"The rents here are already, by Canadian standards, pretty much up there at the top," he said, adding Yellowknife was cited as the most expensive place to live by the CMHC until two years ago, when Fort McMurray edged ahead.

"I don't know if that's something to be proud of, from the point of view of the consumer. Probably not."

Higher rents aren't the only thing the vacancy rate will generate, said Goatcher.

"The supply of apartment buildings is tightening. This is the first year since 2002 that the apartment universe has moved downward. Part of the reason would be low levels of construction, and also, some units were taken off the markets as rentals and converted into condos for sale.

"But with the vacancy rate this low, that should encourage new construction in the new year."

A total of 1,946 units were included in the CMHC survey.

The study found that two- and three-bedroom apartments are most in demand, with vacancy rates for those units as low as 0.9 and 0.5 percent, respectively.

"We have a zero vacancy rate," said Jennifer Eggenberger of YK Dairies Property Management, which looks after seven residential properties, mostly two- and three-bedroom apartments.

"I can see rental prices going up, but I don't think it has to do with the vacancy rate. It's going to be related to the cost of fuel. As costs go up, rates go up."

Eggenberger said she hasn't yet made a decision on increasing her rents, which range between $1,200 to $1,925 a month. But it won't be a significant increase.

"It might be 50 bucks more a month. Somewhere around that range. It's not going to go up by two or three hundred dollars."