Nestled within the vibrant city of Toronto, Ontario, Wychwood stands as an alluring prospect for investors eyeing multi-family buildings. This neighborhood is rich in character, featuring tree-lined streets and beautifully preserved century homes, offering a unique blend of historic charm and modern conveniences. Its strong sense of community, bolstered by local events and initiatives, makes it an attractive choice for potential tenants. What’s particularly enticing for investors is the neighborhood’s exceptional accessibility, with the St. Clair streetcar and subway lines connecting residents to the city center and beyond. Wychwood’s proximity to parks, schools, and a burgeoning arts and culture scene further fuels the demand for rental properties in the area, attracting young professionals and families seeking a vibrant urban lifestyle. With a stable and promising real estate market, Wychwood is a prime location for those looking to make a sound investment in multi-family housing within one of Toronto’s most desirable neighbourhoods.
GTA Real Estate Market
In Q3 2023, the multifamily market in the Greater Toronto Area (GTA) experienced a notable shift. While the long-term outlook remains optimistic, immediate challenges were observed, particularly in transaction numbers and sales volume. Only 8 transactions took place during the quarter, marking a significant 50% decrease from the same period in 2022, with a total sales volume of $91.1 million, in stark contrast to the $627.3 million recorded the previous year. The average price per suite year-to-date saw a 9.1% decline year-over-year, influenced by rising financing costs. The Bank of Canada’s key interest rate reached its highest level since 2001 at 5%, impacting financing costs. Buyers, facing reduced leverage, have shown interest in assumable debt and vendor takeback mortgages for financing.
A distinct trend in market behavior has emerged, with fewer large apartment transactions exceeding $50 million over the past year, indicating a preference for smaller, more manageable deals. On the policy front, the removal of the Goods and Services Tax (GST) on new purpose-built rentals by the federal government, along with expected provincial PST waivers, has stimulated previously shelved rental developments. Rental rates in Toronto have continued to rise, with one-bedroom units averaging $2,620 per month (a 10.5% increase) and two-bedroom units averaging $3,413 (a 7.1% year-over-year increase). In conclusion, despite the Q3 2023 dip in market activity, the multifamily market in the GTA remains resilient, with rising rents, favourable government policies, and persistent demand-supply imbalances in the rental market ensuring a positive trajectory in the coming quarters.