Investor Corner
Know someone that has talked about potentially investing in real estate?
Many of my clients are looking to create a cashflow with an income generating asset to support their lifestyle. Being an investor myself, I am helping them to analyse the current rent market, estimate the returns for the given geography and calculate the cash flow and ROI for a specific property.
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Greater Toronto Area Investment Review (Q4 2022)
The willingness of buyers to invest capital is a testament to their confidence in the market’s stability and prospects for the future amid the constantly shifting post-pandemic economic landscape. The industrial sector returned to top position with the highest investment dollar volume during the quarter and led all asset classes by year-to-date total for the first half of 2022.
Canada Cap Rate For Q4 2023
The lack of rate hikes since July has stabilized the market, as the drastic changes of 2022 and early 2023 recede.
- A decline in borrowing costs in Q4 gave investors some breathing room; the spread between cap rates and borrowing costs widened after narrowing to one percent or less.
- Appraisers expect flat cap rates in early 2024 for many assets, including hospitality, most of apartment and retail, and about half of office and industrial markets.
- Development is slowing down for most assets, as borrowing costs, lender hesitancy, and macro-economic concerns weigh on the market.
Rental Market Report
The vacancy rate for purpose-built rental apartments in the Greater Toronto Area (GTA) decreased from 1.7% in 2022 to 1.5% in 2023. Strong population growth, a resilient labour market and high homeownership borrowing costs contributed to market tightening. Stiff competition for fewer vacant units led to rapid rent growth. The growth in the average rent for 2-bedroom apartments accelerated to 8.7%, the largest increase recorded since 2000. Lower-income renters faced greater challenges in 2023. The vacancy rate for the least expensive units (bachelor units) decreased the most. Moreover, renting these units required a larger share of their income. As a result of a broad-based deterioration in affordability and higher inflation, more renters struggled to pay their rent. The vacancy rate for condominium apartments offered as long-term rentals decreased too, from 1.1% in 2022 to 0.7% in 2023. This was despite a significant jump (+9.1%) in supply.
Real Estate Guides
Refer to our Guides which have been compiled to help you navigate in a real estate environment
Investor's Guide
When a significant percentage of individuals are unable to qualify for mortgages, the demand for residential rentals increases; the resulting low vacancy rates open markets for lower-risk investments in multi-family dwellings. This Guide talks about market trends to consider when making an investment decision.
A Foreign Buyer Ban Guide
When considering buying a property in Canada please review the foreign buyer ban legislation and consult with your lawyer to confirm that you qualify.
Monthly Mortgage Payments
