Yellowknife residents are reeling for the second time in two months, after a plane crashed in an area known as Old Town – killing two, and leaving seven in hospital.

A floatplane narrowly missed nearby buildings, crashing into a parking lot just short of Great Slave Lake after 1 p.m Thursday afternoon.

A spokesman for the Stanton Hospital said there were nine on the plane, two crew and seven passengers aboard the Twin Otter owned by Arctic Sunwest Charters.

"The whole front end is fairly smashed in – it doesn't look good," Jillian Groenewegen, a woman who lives in a building beside the crash site said in an interview over the phone from Yellowknife. "A couple of cars are underneath, [it's] crazy where it landed [with] one wing touching my building,"

"It fell in between there."

Five of the seven people taken to hospital are in stable condition, one is in surgery for a pelvic fracture and the seventh was taken to hospital in Edmonton by air ambulance for back surgery.

This is the second plane crash in the northern region as many months, and the tragedy has affected the tight-knit community already.

"I think a lot of people are in disbelief, because the north is small," Groenewegen said. "When you hear of a plane crash you just assume that it's someone you know."

RCMP Constable Kathy Law said it wasn't clear whether the plane was taking off or landing on the lake when the crash occurred.

With files from the Canadian Press and Kim Taylor