The numbers vary on the source but the trend is the same: housing prices in Whitehorse are on their way down.
Terry Bergen, past president of Yukon Real Estate Association and a current realtor with Coldwell Banker, says that prices have dropped 20 per cent since 2011.
Gary Brown of Yukon’s bureau of statistics has a drop of 13 per cent, from a peak price of $455,700 in 2011, to $394,800 in the fourth quarter of 2013.
Bergen calculated his own numbers, saying the government statistics are often skewed by very few sales.
“We as realtors have to appraise every house we list, so we base the new values on housing based on past sales. We also base housing value on sale prices, not listed prices,” Bergen said.
Brown admits that the government statistics are not necessarily comparing “apples to apples,” but the houses are sorted by subdivision and the numbers capture all sales, not just the ones that go through realtors.
Despite the difference between Bergen and Brown’s numbers, the outcome is the same. Yet the drop in housing prices has not yet been reflected in rental rates.
The average price of a two bedroom apartment has gone from $849 in 2011, to $955 in 2013, according to the Canada Mortgage and Housing Corporation. They are forecasting another increase in 2014 to $975.
Despite these rising numbers, Bergen says the rental rates in Whitehorse are “lower than any comparable city across Canada and way lower than another other northern Canadian city.”
According to the CMHC’s spring 2014 report, which listed the average rent of a two-bedroom unit in Whitehorse in 2013 at $955, the average price of renting a two bedroom apartment in Dawson Creek is $1,085, while in Fort St. John two bedrooms go for $1,050.
Units in Whitehorse that are available for less than $1,000 are few and far between, however. A browse of rentals currently available online has an average listing closer to $1,300.
Val Smith, president of the Yukon Real Estate Association, says that’s because the units with reasonable rates experience very little turn over.
“The places that offer rent for that rate don’t need to advertise,” she said.
In Riverdale, one and two bedroom apartments are available at $750 to $850 a month, Smith said, but they rarely enter the market as the landlords see the value of long-term, established tenants with little turnover.
Smith said the drop in housing prices will soon begin to manifest in the rental rates, and that the most current numbers available don’t accurately reflect what’s happening on the “street level.”
“People are losing their tenants,” she said, offering an example of a landlord who used to rent out each side of an unfurnished duplex for $1,350 a month and recently went through three months of vacancy. Eventually the landlord secured a corporate client, after furnishing the units, and now provides housing for the client’s employees.
Bergen said the drop in housing prices can be traced back 10 year ago, when the Yukon government and the City of Whitehorse fell behind in lot development.
With the influx of lot development that began in 2011, Bergen says the market is now being driven down by oversaturation.
“We have more than a 100 new affordable housing units available for sale or for rent,” he said.
Bergen listed Mah’s Point as an example, the $18-million, 52-unit condo development that opened in July 2011. Those units start at the mid $250,000 range and have yet to be filled entirely.
Brookside development in Crestview is another, with two and three bedroom town- houses still available and starting at $269,900.
Mayor Dan Curtis says that affordable housing is still at the top of the priority list for the city. He said that in public consultations with the citizens of Whitehorse, year after year, affordable housing is the top concern.
“That hasn’t changed,” he said. “It’s still number one on the wishlist, is what we’re hearing.”
A 2012 report commissioned by the Yukon Housing Corporation says that while its clear that housing prices have risen since 2006, it’s debatable that things were less affordable in 2012.
It highlights a range of factors underpinning the increase: strong economic gains, reduced income taxes, declining interest rates, and until 2012 much more favourable lending terms with amortization extended to 40 years between 2006-2008. Up until 2011, Begen called the market “very heated,” but he doesn’t see it returning to that state in the near future.
“It’s looking very stable,” he said. “There’s a lot of construction and there’s a strong market for affordable homes in established neighbourhoods.”
Bergen said that supply has not only met demand but surpassed it, which has cut down on buyers quickly flipping homes.
“There’s no people lining up and reselling,” he said. “The builders aren’t getting the big prices, if they want to charge too much someone else can just go and build one.”
According to the CMHC’s spring report, active listings declined in 2013 to an average of 164 units a month in the first quarter, compared to 226 units the year before. The report attributed the slow sales to the price declines, which may have prompted potential sellers to hold off on listing their home, with the limited selection then compounding the problem.
The trend is expected to continue in 2014, the report says, as the market continues to favour the buyer.
A recent news release from the Yukon Real Estate Association and the Yukon Residential Landlord Association paints a grim picture for the future, citing an oversupply of available units that will continue to push rental rates further down.
Despite this, the CMHC found an upward trend in the burgeoning condo market, with average condominium prices rising to $322,630, a seven per cent increase from 2012 to 2013. The report also found that condos accounted for 37 per cent of total sales.
Over that same period, the average price for single and semi-detached homes declined. Single-detached prices in 2013 averaged $406,300, down five per cent from 2012, while semi-detached units averaged $300,878, down seven per cent.
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