Northland housing market thaws
CMHC will now insure mortgages in trailer park;
move could have implications for city real estate market
Shane Magee
Northern News Services
Wednesday, January 20, 2016
SOMBA K'E/YELLOWKNIFE
The Canadian Mortgage and Housing Corporation will again insure mortgages for homes in the Northland Trailer Park, ending a five-year virtual freeze on the real estate market in the area.
"I'm really happy to hear the news. It's been a long time coming," said Shane Clark, president of the Yellowknife Real Estate Board.
The corporation issued an update Jan. 13 stating it would once again insure mortgages, which allows someone to buy a home with a minimum five per cent down payment.
The federal government agency stopped insuring mortgages in April 2010, in the 258-home neighbourhood run by a condo corporation because its water and sewer system crumbled.
"It really pulled out a large segment of affordable housing in town," Clark said about the decision. He suggested it also drove increased interest in condos in the city.
Adrian Bell, who works as a real estate agent and a city councillor, wrote it "led to to a 'hands off' stance at the charter banks, effectively freezing sales in the neighbourhood for almost five years."
Sales were still happening but at a discount because of the risk involved, Bell said.
"Once they did that, the banks said, 'We're not going to take that risk on ourselves at all, even with a 25 per cent down payment.' There were just no mortgages available," Bell said Jan. 13, adding it prompted some to avoid selling.
"This is the end of a very long process and hopefully provides some relief to the residents," Bell said.
The Yellowknife Condo Corporation No. 8, which was responsible for the infrastructure in the community, couldn't afford to replace aging lines. Eventually the condo corp. and the city reached an agreement that saw the city borrow more than $15 million to fund the work, which was largely completed near the end of 2015.
The city passed a bylaw Jan. 11 which has residents paying $283.27 per month over 25 years to the city to repay the loan.
Approving the bylaw triggered the CMHC to begin considering mortgage insurance applications again, said agency spokesperson Karine LeBlanc.
The move will likely mean more homes being offered for sale, both Bell and Clark said.
Several people Yellowknifer spoke to, including Clark, said they know people who own property in the neighbhourhood who had been looking to sell but were holding off until CMHC changed course, as it now has done.
Clark doesn't believe there will a huge move soon, though.
"Right away, will we see dozens of properties come on the market? I don't think so but certainly we'll see more properties come on the market from the Northland area," he said.
Bell wrote in a note posted to the Century 21 realty website that it's difficult to know the full impact the CMHC's change will have but that "it should mean a lot more affordable housing units will be hitting the market this spring than we've been used to in years past."
What will influence that is how many people have been holding out on selling, he said.
The city's work in Northland is not yet complete. The unpaved roads through the neighbourhood still need to be paved.
That's expected to take place in 2018 at an estimated cost of $1.3 million, according to the city's approved 2016 budget.
