A recent RBC report claiming a “historic correction” is under way in the Canadian housing market has made waves across the country. But is that the case in Yellowknife, too?
The report predicted areas that recently saw skyrocketing house prices, such as British Columbia and Ontario, will be the “epicentre” of a new downturn.
In other provinces, the report stated, prices are expected to remain more stable, but the bank predicts house resales will cumulatively decline by more than 20 percent even in smaller markets — in other words, fewer Canadians will choose to sell their homes.
“It’s a question we’re discussing with everybody,” said Shane Clark, a realtor at Coldwell Banker in Yellowknife. “Whether it’s a seller, someone who’s looking to buy, who wants to get into the market, new people coming to town, people who are disgruntled with where they’re living and want to get into someplace now… in almost every conversation we’re having, [the state of the national market] comes up.”
But Clark says there’s an important cap against falling prices in Yellowknife.
He argues limited land availability and high construction costs mean there simply aren’t enough units being built to keep up with demand. He expects that lack of availability is likely to keep prices high across the territory.
“We’re also a very vibrant, diversified community, so people want to be here,” Clark said.
“We’ve been one of the better places to be in Canada for the past few years, in my opinion. So I don’t think we’re going to see numbers changing here in the same way we’re seeing in headlines in larger centres across Canada.”
Adrian Bell, the owner of Century 21 Prospect Realty in Yellowknife, is seeing a similar trend.
“From a supply perspective, we have been scraping along the bottom for a year and a half now,” he wrote a recent blog post.
“What is most interesting this year is the lower number of listings coming to market … it may be that people are adopting a wait-and-see approach, especially now that interest rates are rising.”
In the south, the Bank of Canada’s decision to raise interest rates in an effort to curb inflation has many predicting lower resale rates and, most importantly, lower house prices.
However, the same thing could end up having the opposite effect farther north.
In an area where building isn’t an option for most buyers, fewer resales may mean an already tight market remains so over the next year.
“We’re keeping an eye on it,” said Clark.