Across the territories, 2018 appeared to be, overall, a strong year for the housing market. Nunavut’s economy and labour market grew steadily. Positive migration and a high birth rate should increase housing demand in the territory. In Yukon, the rental vacancy rate fell to its lowest level in 4 years.
In the Northwest Territories, the situation was a bit more complex. The segment of the population aged 15 or over increased, and the unemployment rate fell. Both of these changes increased demand. However, a slowdown in the mining industry had a negative effect on the resale market, and the addition of new rental units increased the vacancy rate.
We’ve just released our Northern Housing Market Outlook for 2019. This report covers the evolution of the housing market across the 3 territories. Here are some highlights:
Nunavut: Strong economy and population growth signal increased housing demand
- Nunavut’s economy and labour market grew steadily in 2018 and the first 2 quarters of 2019. The population has increased due to positive migration and a high birth rate over the past 2 years. These changes will generate demand for more and larger housing units in the territory.
- On the private rental market, the average rent in Iqaluit increased across all unit types. Iqaluit’s average rents are among the highest in Canada. For a 2-bedroom unit, the average rent was $2,678 in 2018.
- There were 36 sales in 2018, most of which involved single-detached homes. The average home price was marginally lower in 2018, at $509,542, compared to $512,961 in 2017.
Yukon: Vacancy rate continues to fall, but affordability is a concern
- The rental unit vacancy rate in Whitehorse was 2.4% in October 2018. This was a decrease from 2.8% in October 2017, and the lowest level it has reached in the past 4 years.
- Strong population growth for those aged 65 and over stressed the need for housing that accommodates an aging population.
- Families earning less than $30,000 wouldn’t be able to afford the average 1- or 2-bedroom rental unit in Whitehorse.
Northwest Territories: Weaker growth in mining will likely affect the housing market
- Weaker growth in the mining industry will likely cause job losses, especially in the construction sector. This will probably affect the housing market, since construction projects provide some support for the market in Yellowknife.
- In 2018, the population aged 15 and over increased by 300 people. The unemployment rate, meanwhile, fell to 3.3% (from 3.4% in 2017). Together, these changes created extra demand on the Yellowknife housing market.
- The overall vacancy rate rose to 5.2% in 2018, as the rental universe increased marginally to 2,018. This was the largest rental universe since 2013. We expect the rental vacancy rate to remain relatively stable in 2019.
- The decrease in demand from the mining industry may have affected the resale market, since sales fell 25% in 2018. We expect sales to increase in 2019. However, they could remain lower than 2017 levels, because of mortgage rate increases and uncertainties in employment from the mining industry.