Which Canadian cities are top for property investment?

Published in: Canadian Real Estate Wealth Magazine - June 24, 2015 

Oshawa, Thunder Bay and Windsor have been the best performing markets for real estate investors over the last five years, according to a new report by SpendTree.

In particular, a home purchased for $100,000 in Windsor in 2010, rented for five years and sold in 2015 would earn returns of 27 per cent.

One investor in the hot market said the city is built for future growth. “The market is great right now and the houses are affordable,” said Tyler Souillere, founder of the TySoull Real Estate Group. “Prices are appreciating as well and the average investor, depending on property type, could see up to 20 per cent returns.”

SpendTree’s report comes as Canada’s biggest cities are increasingly more difficult for investors to cash flow. For instance, the above scenario in Toronto would yield returns of just 22 per cent, while Vancouver’s yields would be just 12 per cent.

Among the areas seeing high demand and interest from investors in Windsor is Walkerville and Riverside, according to Souillere.

After being hit hard by the recession in 2009, the city is starting to recover as one of Ontario’s premier spots for real estate, with prices elevating about $10,000 a year for the last five years.

And with two post-secondary schools and emerging office space improving the commercial sector, the future is looking bright and holding true to its worth as one of the top cities for investment.

According to the report, Thunder Bay ranked as the top city for real estate investment with a five-year capital gain total of $191,621 followed by Oshawa which tallied $168,858 in five-year capital gains.

Thunder Bay also led all Canadian cities in estimated home appreciation, as well as average annual net cash flow from renting over the five-year period.

Markets in Atlantic Canada generally offered strong income, but weak to no price appreciation.

The report assumed each investment carried a mortgage representing 80 per cent of the purchase price at an interest rate of 3.5 per cent and amortized over 25 years.

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