Housing Confusion: CMHC, NPREIT’s Numbers Don’t Add Up

Canada Mortgage and Housing Corporation and Yellowknife’s largest landlord are reporting wildly different vacancy rates for apartments in the city.

In a recent conference call with investment analysts, Todd Cook, president and CEO of Northern Property REIT, said the vacancy rate for 1,060 apartments it owns in Yellowknife was between 10 and 14 percent in the first quarter of 2015.

Those numbers are consistent with NPREIT’s year-end report for 2014, which disclosed a vacancy rate for the Northwest Territories of 12.7 percent, compared to 2.8 percent in Nunavut, where its tenants pay the highest rents in Canada – an average of $2,425 a month compared to $1,637 in the NWT, the second highest in the country.

However, the latest report from CMHC states that Yellowknife’s apartment vacancy rate dropped to 2.8 percent in April this year, from 5.9 percent in April 2014.

NPREIT did not respond to questions about the apparent discrepancy. CMHC said that its rental market survey covers “the entire rental market and does not address the state of any specific company.


“There is a specific, and standard methodology applied to the various indicators in CMHC’s rental market survey that may not make CMHC’s numbers directly comparable to numbers in external reports.”

According to the latest CMHC report, the reduction was driven by increased occupancy of two-bedroom units, which saw a decline in vacancy rates to 3.6 percent in April this year from 7.4 percent in 2014.

NPREIT opened its 24-unit Aurora Heights project last year and CMHC reported an increase in the number of available rental units in Yellowknife to 1,630 from 1,584 in April 2014. (The recent fire which wiped out Polaris Apartments, an NPREIT property, has since definitively reduced that number by 17)

The average rent for a two-bedroom apartment in Yellowknife in April this year was $1,682, a dip of 1.6 percent from the previous April, according to the CMHC report.

CMHC attributed increased rental demand and decline in vacancy rates to mining and highway projects in the NWT, and growth in average weekly earnings.

Nevertheless, the CMHC report noted, “overall employment level in the NWT declined in April 2015 on a year-over-year basis by a total of 600 persons, all of which were full-time positions. With the number of jobs declining, net-migration in the NWT posted outward flows of 832 people in 2014.”

In contrast to the minor rent decrease CMHC reported for Yellowknife, NPREIT has been forced to match the incentives offered by competitors in Fort McMurray and Lloydminster, where the oil industry downturn has pushed vacancy rates to 20 percent, Cook told investment analysts.

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