Top 4 Ontario Property Investment Cities
Several forthcoming reports on the best cities for property investment in Ontario (SpendTree, Moneysense) suggest that looking outside the biggest housing markets will yield the most robust returns. Here’s our top 4 housing markets which are sure to surprise you.
Thunder Bay. Yes, really.
In the last five years, real estate prices in this Northern Ontario city have appreciated at a rate of 8.4% — faster than in any other city in Canada. While most families would not consider moving there, investors should definitely have their interests peaked by the 22.4% 5-year rent increases here as well. With average home prices of $215,000 in T-Bay, this tops our list and makes it a remarkable rental property investment opportunity.
Anyone that’s been paying attention has noticed that Hamilton, formerly known as ‘Steel Town’ (or as I lovingly call it, ‘Hammer Town’), is gentrifying and becoming a new destination for those looking for employment and housing outside of the ultra-competitive Toronto market. At $443,000, Hamilton’s average home price is higher than one might expect, but the city also has the highest compound annual rate of return for 5-year period at 7.3%. An even more telling fact is that there has been an 18.1% rent increase in the last five years, in part because of high average household incomes (about $85,000), along with low unemployment rates (4.5%), which is significantly lower than the current national average of 7.2%.
Windsor has some of the cheapest housing in the country, which can be seen as a good trait for the entry level investor. The U.S. border city is experiencing some good trends, such as the unemployment rate decreasing below 8% and the rental vacancies being at about the 4% mark. In 2015 the Windsor Star reported that purchasing and renting out an investment property in Windsor, Ontario would return 27% in a 5-years after it sells. This is taking into account the rental income + the property appreciation. Compare that scenario to just a 12% return in the Vancouver market, or 22% in the Toronto market, and there’s a clear message here. Average home prices are just less than $200,000, with 5-year rent increases reaching just over 10%.
Another established University town, Guelph was ranked 4th on Money Sense top investment opportunity cities in Canada. Keeping in trend with others on the list, the average 5-year rent increase is high at 14.1%, with 5-year appreciation value at 5.1%. An astonishing figure is that rental vacancies are hovering around 1%, making it deal for a rental property targeted towards students or professionals. Average home prices fall in between Hamilton and Windsor at $378,573.
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