by Jack Danylchuk
Vacancy rates and rents are on the rise in Yellowknife, defying traditional market behaviour that tends to dictate lower prices in the face of a surplus. The average vacancy rate for bachelor, one, two and three-bedroom apartments jumped to 4.8 per cent this fall, according to the latest report from Canada Mortgage and Housing Corp., an increase of .7 per cent from 2013.
The cost of renting a two-bedroom unit increased 1.4 per cent to $1,686 a month during the same period, while the number of private apartments dropped by nearly 100 to 1,596 units from 1,692 units in October 2013.
Yellowknife and the Northwest Territories continue to suffer the effects of the 2008-09 recession, which cut 900 jobs between 2013 and 2014 and sent 563 persons to other jurisdictions in search of work, according to the CMHC report, which drew on territorial government data.
Apartments converted to hotels
However, Yellowknife landlords were able to shield their investments from the full impact of the recession and outward migration by converting apartments to hotel suites for the booming travel market, the report said. According to the territorial government, “there was a substantial increase in visitors for tourism and business travel,” the report said, “and 96 units were removed from the rental universe, largely due to hotel conversions.”
“One-bedroom and two-bedroom units, which collectively represent 89 per cent of Yellowknife’s rental market universe, both saw their supply reduced by 37 units from October 2013 to October 2014,” the report said.
For two-bedroom apartments, which represent 48 per cent of the apartment rental stock in Yellowknife, the vacancy rate was 3.9 per cent in October 2014 compared to 5.4 per cent in October 2013. Three-or-more bedroom apartment units showed a zero per cent vacancy rate in October 2014, down from 0.7 per cent in October 2013. The vacancy rate for bachelor apartments was 5.3 per cent in October 2014, a decrease from 7.4 per cent from the previous year. For one bedroom apartments, the vacancy rate increased to 6.9 per cent in October 2014 from 3.4 per cent in October 2013.
Rents for bachelor, one bedroom and three-bedroom units were unchanged from October 2013 to October 2014. The major influence was the 1.4 per cent year-over-year increase in two-bedroom apartment rents, the report said. Including both new and existing structures, the average monthly rent for three-or-more bedroom units was $1,836 in October 2014. One- bedroom units rented for $1,394, while bachelor suites rented for $1,169 per month in October 2014.
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