Investing in Ontario real estate has become increasingly popular in the last few years. And it’s no wonder with inflation rates that Ontarians would want to put their hard-earned savings out of the bank and put it into an asset. Below you will discover our list of the best places to invest in real estate in Ontario 2022.
The cost of everything is going up… everything except salaries, at least not in proportion to food, gas, housing, etc. People are realizing that their savings aren’t going as far as it once did. And it’s hindering a lot of would-be first-time home buyers from purchasing. Their savings aren’t growing as fast as house prices.
On that same note, people are realizing that money they’ve saved away for a rainy day or for retirement isn’t going to get them far anymore. Instead, more people are looking to park their money into something that can generate wealth and hold value, like real estate.
We’re not talking short-term buy and sell speculation, but long-term investments into Ontario’s housing market.
There is high demand for housing in Ontario, and the rental market has felt that demand with low inventory. Across much of Ontario, vacancy rates are down, and that’s contributed to rising rent prices in many cities.
Demand keeps growing thanks to an exploding population. The Canadian and Ontario governments continue to project massive growth from immigration. On top of that, new housing developments in Ontario are falling drastically short compared to the number of new families entering the province.
Only 20% of immigrants purchase a property in their first 3 years living in Canada. After 10 years, it increases to 50-60%. That’s a good indication that the province will need a lot of new rental units in the coming years to meet the planned wave of immigrants.
From 2016-2021 Ontario only built 36.9 new housing units for every 100 newcomers. And it’s estimated that we need a million new homes in Ontario in the next 10 years to meet the population growth, yet we’re nowhere near target. This low supply to demand ratio isn’t going away anytime soon the way things are currently going.
And the government is counting on average citizens to invest in real estate and to convert single-family homes into multi-unit properties. In 2019, Bill 108 came into effect here in Ontario. It allows 2 units in a residential unit PLUS a residential unit in a building or structure ancillary to a house. That means there’s potential for turning a single-family home into a property with 3 legal residential units. And with the increasing demand for homes in Ontario, the power of going from 1 door to 3 is pretty magical.
These are just some of the reasons to consider investing in real estate in Ontario, Canada in 2022.
Toronto continues to be the centre point where everyone comes into the province. It’s the growth centre of the province, and people spill out from there but demand for Toronto isn’t going to calm down anytime soon.
Long-term, investing in the Toronto core or the Greater Toronto Area in 2022 makes sense. Prices on average are higher than other cities, but the long-term demand for this key area of Ontario is unmatched.
Toronto is an interesting place right now because in recent years a considerable amount of people have moved out of the city. That doesn’t mean the city is shrinking, far from it. Such a high percentage of newcomers to Ontario land in Toronto, and there’s so much business growth in the city that inter and intra-provincial migration isn’t having a noticeable impact on demand. So, even if tenants move on and move out of the city, there’s a large pool of newcomers looking for good rentals in the city, which is a real plus when investing in real estate.
Toronto also saw the biggest “Brain Gain” with more skilled tech graduates than any other city. Toronto also saw the highest percentage of new tech job growth of any city in Canada or the United States. Good jobs are being created. The city is seeing healthy, desirable growth, and that's why it's on our list of best places to invest in real estate in Ontario in 2022.
City of Toronto: $1,190,300
GTA: $1,172,900
East of Toronto, there is a lot of growth in the Durham region. This region is expected to grow 10+% every 5 years, for a total projected growth of 80% in the next 30 years! There’s a lot higher rate of growth North and East of Toronto, and the Durham region is going to transform!
When you’re seeing above-average growth like this, it’s hard to ignore. House prices are higher than in other regions, but with a long-term outlook on your investments, this region still has a lot to offer investors who are willing to think 5, 10, 15 years down the road.
Durham is a great example of thinking long-term. In May 2017 the average price for a home in Durham was $653,000. But that July, the average price dropped to $570,000! The news was saying Durham was a bad place to invest and people had overpaid. But that drop was temporary, and because of continued low interest rate, low supply and high demand, the prices went back up, and kept going up.
House prices in Durham have gone up 33.4% on average in the last year. And we’re not saying house prices will continue to go up at that rate long-term, and there could be another drop in prices. But when you think long-term, and you know the fundamentals of the market, there is a lot of potential in Durham.
Average House Price: $968,500
Investors are still having a lot of success in Hamilton. The city continues to evolve and grow, and it is a wonderful place to buy or rent.
In the last 20 years, Hamilton has had a drastic change in the types of jobs in the city. From 2002-2017 the city lost 18,000 manufacturing jobs, but it gained 22,700 healthcare positions, 16,000 construction jobs, and tens of thousands in other sectors.
Hamilton, like many cities, saw a large jump in unemployment in Spring 2020, but it’s bounced back and new businesses are popping up across the city. The city is back on track to see substantial growth in the coming years.
While home prices are higher than some areas on this list, the rents are also generally higher and are allowing homes to cash flow nicely for investors.
Homes with secondary suites, or homes that can have secondary suites added, are prime investments and are collecting high rents based on the demand.
Student rentals near Mohawk College and McMaster University have also done well historically. Even when schools shut down in-person learning, we saw little impact on the student housing market.
Hamilton is a large city with distinct pockets. Different investing strategies work in different areas. Before investing in Hamilton, it’s important to work with a seasoned investor who knows the city to maximize their knowledge of what will work well.
Hamilton West: $698,829
East Hamilton: $667,033
Hamilton Centre: $625,038
The Hamilton Mountain: $789,085
The Niagara region is a far cry from a well-kept secret with investors these days. Demand is high in the region for good investment properties, but that doesn’t mean it’s not worth trudging into the melee and fighting for one of the gems the region has to offer.
Close to the U.S. border, good highway access to Toronto, and the continuing expansion of GO train transit, Niagara has become an appealing option for many to buy and invest in.
St. Catharines has been on our list of Best Places to Invest for the last few years, and Welland joined the lineup in 2021. But this year we’re broadening out because the region has so many hot pockets that investors are having great success buying and filling properties.
Niagara Falls and Port Colborne have both become popular places to invest, and for good reason. Not only are prices on the lower end, but there’s also high demand for rentals in these areas.
The Niagara region is planning for a population boom above the provincial projections, knowing those projections often run lower than what we actually see. The region is actively working on densification while growing its tourism industr, and that’s why it is one of the best places to invest in real estate in Ontario for 2022
Vacancy rates are also low across the region. Good homes in good areas don’t tend to sit empty long. We’re regularly seeing prospective tenants offer multiple months’ rent in advance to put themselves in a competitive position because there is so much competition for rentals right now.
Whether it's in St. Catharines, Niagara Falls, Welland, Port Colborne, or somewhere else, the Niagara Region is a fantastic place to live and invest in 2022!
Average House Price: $701,700
St. Catharines: $654,900
Welland: $571,300
Port Colborne: $541,300
Niagara Falls: $649,800
The Kitchener-Waterloo is another one of our best places to invest in Ontario in 2022. In the last few years, the KW area has undergone a tech boom. Like Toronto, maybe large tech companies are opening offices in the region. It’s bringing in a lot of new people and new money.
Some tech companies are finding that they can’t hire fast enough, that new jobs are outpacing applicants. With massive growth in the tech market, the Kitchener-Waterloo is attracting a lot of well-educated people.
The Waterloo Region already has the largest population outside the GTA, and it’s expected to grow slightly above the provincial average. There are a lot of people moving here. 56,000 in the next 5 years, and 305,000 in the next 30 years (that’s like the current populations of Barrie and Guelph combined)!
Kitchener-Waterloo is on the other side of the Greenbelt, unlike many of the places on this list. That’s allowed the city to expand to accommodate growth, yet they’re still actively working to build more densely to meet Ontario’s provincial guidelines.
Kitchener is another town on board with accessory dwelling units. According to the Kitchener website, “tiny houses, laneway suites and backyard homes all fall under the permit category of Additional Dwelling Units (Detached). Our zoning bylaw allows for these buildings on most properties zoned R-1 through R-7.”
One thing to note, The city of Waterloo does have rental licensing. So, anything that investors would be buying in the CITY of Waterloo itself needs a license. It’s a pretty simple process but does require specific HVAC and electrical inspections to be submitted along with a floor plan (hand-drawn) and payment, criminal check by the landlord in the first 12 months, and plus yearly renewals.
Average House Price: $825,000
Like all of the cities on this best places to invest in real estate in Ontario 2022, Barrie continues to be a popular place for people looking to move out of the city, gain access to “northern” living, and still be commutable into Toronto.
Barrie’s population is about to explode. The province is expecting the city to grow by 20% in the next 5 years alone. And it’s anticipated to grow 92% in the next 30 years, more than any other city in the Greater Golden Horseshoe. The average growth rate is “only” 45% in the next 30 years, Barrie is more than double that! Getting in now, is an incredible opportunity because demand is about to skyrocket.
Barrie was one of the first cities to really get on board with allowing Accessory Dwelling Units (ADU) to be added to residential properties. Given the population boom coming their way, this is a smart move. Allowing homeowners to go from a single unit home to adding a legal secondary suite in the basement, and adding a detached ADU in the backyard takes 1 residential unit and turns it into 3. This is great for accommodating growth, but as investors, adding doors to your portfolio is a big plus. 3 units at one property can generate more income than a singular home.
Investors who can find opportunities now to buy single-family homes that meet requirements and are willing to put in some work to add additional units can greatly benefit.
Orillia is one neighbouring city that’s expected to feel the spillover effect from Barrie’s growth. It’s expected to grow its population by 11% in the next 5 years.
A 30-minute drive from Barrie, Orillia is located at the north end of Lake Simcoe, and we’re seeing more and more investors buying here who are going to benefit from long-term growth!
Barrie: $836,147
Orillia: $691,427
Brantford has become a popular choice with people looking for a little more house and yard.
Property prices have had huge gains in the last year, but don’t let the entry price scare you. This is still a wonderful city with huge potential.
Brantford is expected to have above-average population growth in the next 30 years, growing by 56% in that time. Some of that will likely be a spillover from Hamilton.
The city has an intensification plan in place, which will further build up areas that are already built up and remain sensitive to existing neighbourhoods. After expanding the city boundaries in 2017, it now has clear plans for how it’ll accommodate the expected growth over the next 10 and 20 years with an even balance of urban and residential areas.
Average House Price: $806,215
London is another market that’s exploding in Southern Ontario.
London is located in southwest Ontario, halfway (200km) between Toronto and Detroit, Michigan.
London is located in Middlesex County, which is expected to grow as much as 42% in the next 25 years.
London also has a large healthcare field with London Health Science Centre as its largest employer and St. Joseph’s Health Care Centre as its third largest.
London has a large and growing student population. Both Fanshawe College and Western University are “actively recruiting” international students. International students are a massive source of income for universities and the Canadian economy, and the number of international students coming to Ontario has tripled in the last decade.
Students are generally here for 4+ years, so many of them rent, which adds significant demand in a market that already has low vacancy rates.
Many of these students apply for permanent residency after completing their studies. Prior to 2017, international students looking to apply for citizenship were required to be permanent residents in Canada for 4 out of 6 years, but with the new law, they are only required to stay in Canada for 3 out of 5 years.
The easier process for international students to become Canadian citizens will likely motivate many more students to come to Canada for their studies.
International students and their families are driving demand for real estate. Some have started purchasing homes for investment. Others are planning on renting for a while before making the leap into homeownership.
With London’s growing healthcare field and active push for international students, London continues to be on our best places to invest in real estate in Ontario in 2022.
Average House Price: $673,995
If so, there's a lot of potential to find good, cash-flowing properties right here in Ontario. While these are some of our best places to invest in real estate in Ontario in 2022, you can be successful in many communities across Southern Ontario. If you’d like to learn more about investing in real estate, you can sign up for an upcoming 90-minute live training class hosted on Zoom. We’ll cover investing strategies that are successfully being used in Ontario right now. Plus there will be a questions and answers period at the end of the class.
Are you a new investor, or looking to improve your investing strategy? Check out our 10 crucial real estate investing tips for driven investors.
Want to check our list from last year? Check out the Best Places to Invest In Real Estate In Ontario 2021 here.
