Strong immigration and employment growth is pushing Toronto’s investment rental property to the forefront, according to Marcus & Millichap’s Q3 2019 Multifamily Market Report covering the GTA.
In the first half of 2019 alone, the region saw the addition of 81,600 new jobs to its economy. On a year-over-year basis, employment in the market grew by 3.4% in June, outstripping the 2.9% annual increase during the same month last year.
Over the four quarters ending mid-2019, investment propertytransaction volumes went up by 8% annually.
“Buyer activity was widespread, with elevated interest in the areas of Etobicoke, York and Scarborough,” Marcus & Millichap stated, noting that much of the vitality could be attributed to “favourable” demographic and geographic fundamentals.
“Pent-up rental demand and strong rent growth will keep investors active this year, broadening their searches across the metro for remaining upside. A rollback of rent control regulations on new builds will boost demand for recently completed projects.”
Indeed, the trend has become especially apparent over the last few years. The region’s robust economy has driven the formation of more households, “a key driver of apartment demand.”
This interest has pushed the average price of an investment rental property up by 9% year-over-year, settling at just above $277,000 per unit. This level was as high as $300,000 in the core.
A sizeable number of world-class companies, especially in the high-technology segment, have also been magnetized by the GTA’s landscape.
“A less restrictive immigration policy in contrast to the U.S., coupled with a mature tech ecosystem backed by government incentives and world-class universities, has Microsoft, Amazon, Pinterest and many other global firms searching for talent in the metro,” the report added.