Does your experience of housing in Yellowknife sound like this?

While a softer economy can often mean housing prices begin to stabilize, a new report from the Canada Mortgage and Housing Corporation finds the opposite in Yellowknife.

Released on Wednesday, CMHC’s 2026 Northern Housing Report noted the Northwest Territories’ real gross domestic product shrank by two percent in 2025 as a result of changes to the mining industry in the territory and the dwindling price of diamonds that year.

“What we’re observing in Yellowknife is the economy was a little bit weaker, and normally what we would expect in the circumstances is that house prices would moderate a little bit,” said CMHC’s deputy chief economist, Aled ab Iorwerth.

“This time around, we still see house prices increasing and it’s hard to find a place to rent – and so all of this suggests we just need a lot more housing in Yellowknife.”

Ab Iorwerth said the cost of housing across the three territorial capitals analyzed remains high, as does the cost of building new homes.

In 2025, the cost of construction – based on options in CMHC’s housing design catalogue – rose to about $470 per square foot in Yellowknife. That figure was just under $400 in Whitehorse and $310 in Calgary.

Of the three cities, Yellowknife had the lowest rate of housing starts per capita, at 34 per 10,000 people.

Factors that contribute to the higher costs include short construction seasons that require accelerated schedules and overtime pay, a reliance on specialized transportation for materials and labour (including by air and by ice road) and limited delivery windows.

Despite this, home sales in Yellowknife grew by 7.4 percent and new listings increased by more than 10 percent. The report said sales were supported by employment growth that was higher in the capital city than in other parts of the NWT.

Affordability issues

CMHC found that ownership affordability has “deteriorated significantly” since 2021.

“Prior to the slowdown recently in mining, there was economic growth in the Northwest Territories,” said ab Iorwerth.

He said population growth and higher demand for housing led to a loss of affordability.

In 2021, with low interest rates caused by factors brought on by the Covid-19 pandemic, people may have been entering the housing market for the first time, buying up existing supply and driving up demand, ab Iorwerth said.

He said we may be seeing the “lagged effects” of that activity.

The report found the affordability gap for homeownership remains worse for Indigenous households, which ab Iorwerth said is explained by lower incomes in some cases.

In the past five years, the aggregate average price of a home in Yellowknife rose from just below $450,000 in 2021 to just shy of $525,000.

The report found that 39 percent of those living in Yellowknife couldn’t afford the average price of a new mortgage, up from 25 percent in 2021, though ab Iorwerth noted 2021 was an outlier due to pandemic-era interest rates.

According to CMHC, housing is affordable if it accounts for 30 percent or less of a household’s income.

Similarly, 21 percent – or about one in five people living in Yellowknife – could not afford the cost of the median market rental unit in 2025, up from 19 percent in 2021.

Rental unit stock remains low

The report found vacancy rates in Yellowknife have “remained exceptionally low” despite substantial growth in supply.

Last year saw the opening of a number of new and renovated housing projects, including The View, The Nest and the renovated Aspen Apartments.

The city’s vacancy rate has dropped to 1.3 percent overall, almost half of the five-year average.

“Historically strong working-age population growth, supported by job gains, continued to absorb new units,” the report noted.

The vacancy rates for two-bedroom units fell to 0.8 percent.

“This is a fairly broad issue,” said ab Iorwerth.

“Because home ownership is so unaffordable – it’s so difficult – if [people] want to live in Yellowknife, they go into rental housing and there’s not enough rental housing being built, so the vacancy rate is coming down.

“In parts of the rest of Canada it’s going up because of the economic situation – macroeconomic uncertainty – but it’s in some of these areas like Yellowknife, where home ownership is so expensive, that people go into rental.”

Housing crises

Ab Iorwerth said that in his view, there are three housing crises happening concurrently across Canada.

“One of them is the housing crisis in the North among Indigenous households and across the territories. Housing costs are very high for a variety of reasons, but it is a very central concern,” said ab Iorwerth.

He said the other two crises exist among low-income people across the country and middle-class Canadians looking to rent or buy their first home.

To address affordability and supply issues in the North, ab Iorwerth said there’s a need for innovation to help lower the high cost of construction.

“I’m not an engineer, I don’t know really how to fix that,” he said, but the territories need lower transportation costs to help more mass manufacturing of housing.

“In other parts of Canada, there are different challenges, but it seems in the North that this cost of construction is a core challenge,” he said.