Fall 2022 Yellowknife Real Estate Market Update
I was recently interviewed by journalist Jonathan Gardiner at NNSL regarding the state of the Yellowknife Real Estate Market. Here are my answers in full. Please note, the stats I reference are from August 1 to Nov 23.
1) What is the state of the housing market right now in Yellowknife?
The Yellowknife market has slowed down considerably this fall, which is consistent with what we’re seeing right across the country. Since the beginning of August we are down 29% in listings sold compared to a year ago. But what’s interesting to me is that the number of homes coming to market – the number of new listings – is down slightly more than the number of sales. So it’s not so much a case of homes being listed for sale but not selling. They are selling. People are just taking a bit of a breather before putting their homes on the market, likely waiting for the spring rush to give themselves the best possible chance of maximizing their sale price.
2) What happens to the housing market in Yellowknife when the Diavik mine closes in a few years?
It’s hard to predict exactly what will happen, but I think it’s safe to say that there will be a lot more listings on the market for a period of time. We know there were 350 Yellowknifers employed at Diavik in 2020. Some of those folks will find other work locally, some may retire and stay put, but many will not. We have already seen a small number of Diavik employees make the move early rather than waiting for a possible glut of listings to hit the market. I was surprised to see this start to happen so far out from mine closure, but it is happening. It’s possible that those jobs are not being backfilled – that would be a question for the folks at Diavik. If that were to happen, we might have a more gradual increase in listings over a longer period of time. That would be better for people’s property values.
It is also hard to predict is how other projects like the remediation of Giant Mine will offset Diavik’s drag on the real estate market. I believe Giant will employ 260 people at its peak. But I don’t think the peak will coincide with the 2025 Diavik closure, I believe it comes closer to 2030. And, given that many of the jobs will be seasonal, I suspect that many of the Giant employees will be renters rather than buyers. Will there be other significant projects that come along and help ease the pain? It’s not impossible, but I’m not counting on it.
3) Are housing costs going up or down?
It’s too early to say with any certainty. The median average sale price this fall is down by 4%, but it’s hard to tell if that’s a real number or just a result of a different “sales mix” – i.e. smaller homes coming to market. We don’t have the kind of data here that you would need to make that assessment. Personally, I think we’ll see prices plateau for a while rather than going either up or down. A lot of listings will be priced similar to last year, but then if they sit on the market for longer and longer, prices will start to dip. We’re seeing the first hints of that, with average days on market rising from 40 to 45 this fall. But we’ll have to see if that trend continues.
4) What kind of spring season are you expecting?
The federal government is working very hard at taming inflation, and housing prices are a big piece of the puzzle. I have no doubt they will succeed and it will impact markets right across the country. But we are fortunate here in that home prices didn’t rise as high as the rest of the country over the last couple years. So we don’t have that far to fall to return to “normal.” And I also think that, given how transient Yellowknife is, there will be no shortage of eager buyers looking to move here to take the jobs and buy the homes that are made available. Sellers will have to price their homes more competitively, and they will be more reliant on professional help than they tend to be during hot markets, but I still expect it to be a very busy spring and a healthy, more balanced market.
5) Are there any other details you feel are important that you would like to share?
It would be really great if the folks at Diavik could provide more details about their closure as it approaches. And more details about how many of their employees are homeowners as opposed to renters. The more information they can provide the easier it will be for the rest of the community to plan for impacts on their property values.
