NWT Update

Adrian Bell

Daniel: What's happening in Northwest, what's happening in Yellowknife in terms of legal suites, all that kind of stuff. Are people big on wanting to quote unquote maximizing their footprint?

Adrian: Yes, people are big on it. Then the municipality is big on it too. While there isn't a whole lot of population growth and job growth up here right now there is zero land available for new development. We're wedged in because there's a lot of land outside of Yellowknife. That's tied up in indigenous land claims. It could be 15, 20 years before there are really any new subdivisions. As a result, the city and investors are really looking for opportunities to infill. There's a zoning bylaw review going on right now.

That's one of the main focuses of it. I was on city council for six years and one of the things we did was a review of the secondary suite bylaw. We don't have a territorial building code here. It's just the Canada national building code, but we really loosen things up in terms of fire separation.
It had been difficult to build attached secondary suites five, six years ago because of the requirement for sprinklers, for one example then they updated that to just require a certain amount of drywall and fire separation through dry drywall. There are definitely some opportunities there and there's also a lot of short-term rental going on.

You see a lot of people buying. These homes that are easily divisible quite often they're in the downtown core. And there'll be separating the top from the bottom residing in one half and renting out the other through Airbnb. That type of thing could be very profitable. But the other big opportunity here, I think, is that it is very much a government town now.

It was once a gold mining town rather than a diamond mining town, but in the background more and more it's become predominantly public sector. And there's been a new hospital development and the entire area is really growing and proximity to the hospital is something that strategically for investors is very important to try to get units that are within walking distance to that facility.

Daniel: In other words, there are ways and approaching cities in Yellowknife right now to either buy an either cash flow or buy and do some bird strategy. And like you said, and then make some money.

Adrian: There's not a lot of flipping going on. There's probably just 2% appreciation. It's not great, but definitely cash flow. We've got the second highest rents in the country. I think second only to Nunavut average household income, I think is 146,000. We very frequently rank near the top of lists for household discretionary income. I think the money sense magazine used to do one annually. I believe we were typically only behind West Vancouver and Fort McMurray in Canada for average households.

Daniel: Wow. Okay. Do you personally give realtors right now? Do you have a listing that people would be able to get information on if they contacted you? That has some good potential for cashflow?

Adrian: We certainly do. I'll show you a couple, but I want to be completely honest. I think right now we are experiencing a bubble. And I know that the previous presenters were saying that they didn't feel that was the case and that the frenzy is likely to be sustained. But for us, I think right now we just had a month of March.

That was more than double the sales of last year. And that's not the minute borders opened. And the minute people can move back South, they are going to rotate back out. This is a place, very transient, very young population. People come here for their 5 to 10 years and then they move. For the last year and a half, they haven't been able to move, but they have been able to continue to come into the territory and deal with life because we have very relaxed COVID regulations.

People are able to move here for work. The government has been filling up their short-term and casual labor pool. There's been a lot of demand for housing. It's not going to last. These are our listings. Take that all with a grain of salt. I do want to sell these properties for sure.
But I do think the opportunity really is for your members, the opportunity is 6 months to a year from now when these homes aren't selling and three days with five offers. I think that's when the opportunity will arise. But you've got to arrange housing prices. It's these lower price ones that you can rent these out for $2,800 a month.

They can cash flow, somewhere around $600 a month, I would say. There are of course some newer ones. This is a nicer, newer unit. There's a wide range of housing, obviously in young life, like there is everywhere. This would be a newer one, but at this price point though, it's a little bit harder to be looking at it from a cash flow perspective.

I highlighted this development because it is close to the hospital and this is actually a development that I'm hoping to purchase within the next six months. I currently just don't own commercial property. And so this will be my first foray into a residential real estate investment.
These furnishings can be rented out for 3,500 a month. And they cost $340,000. I think there are definitely some great opportunities to invest and really stability other than this current COVID bubble that we're experiencing. Stability is the norm here.

That's something that you can count on. The wages remain high. They always will because you have to pay people. The government has to pay people well to get them to move to the North. Our winters are harsh and it's not a place where people tend to retire, so we can really count on the government keeping the current situation going. And I won't go into detail on this, but this is just an example. What you might be able to rent one of those out for so that that can be accessed.