Looking at 2022, real estate may seem like a risky roller-coaster ride, but when you step back and look at investing long-term there is a lot of opportunity if you know the best places to invest in real estate in Ontario 2023.
Investing in Ontario real estate has become increasingly popular in recent 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 2023
Inflation drove the cost of living up dramatically for Canadians in 2022, and so far, that looks like it’ll continue in 2023. What hasn’t kept up is wages, at least not compared to the cost of food, gas, and other essentials.
Canadians are realizing that the money they’ve saved 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.
Even in 2023, 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.
And while house prices did come down in many parts of Ontario in 2022, with rising interest rates, owning a home didn’t become more affordable. That said, investors are still finding and investing in great properties with long-term possibilities.
Why do we feel confident investing in real estate in Ontario in 2023?
Demand keeps growing thanks to an exploding population. The Canadian and Ontario governments continue to project massive growth from immigration. Canada saw record population growth in 2022 and also increased its yearly targets. We’re now expecting half a million newcomers every year.
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 of 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 the target. Ontario’s low housing supply-to-demand ratio isn’t going away anytime soon the way things are currently going.
These are just some of the reasons to consider investing in real estate in Ontario, Canada in 2023.
One of the best places to invest in real estate in 2023 in Ontario is Toronto. With a long-term outlook, Toronto, or the Greater Toronto Area (GTA) as a whole, is the centre point where many newcomers come into the province.
In recent years, Toronto has had considerable spillover, with people moving out of the city to towns and cities across the Greater Golden Horseshoe. That doesn’t mean that the city is shrinking, or you should be worried about a lack of demand for housing.
Yes, Toronto will have some turnover as newcomers get settled and move out to neighbouring towns and cities. However, given Canada’s immigration and international student forecasts, there will be a continuous influx of demand moving into the area.
As Toronto grows and evolves, it is going to continue to be the heart of the province.
Toronto ranked 3rd in North America in the 2022 Tech Talent Report released by CBRE, only behind the San Francisco Bay Area and Seattle. Toronto had the highest tech talent job growth since the pandemic began, adding 39,700 between 2019 and 2021. 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: $1,074,300
GTA: $1,089,800
One of Ontario’s fastest-growing regions is Durham, located just east of Toronto.
The Durham region is expected to grow over 10% EVERY FIVE YEARS, for a total projected growth of 80% over the next 30 years! It makes sense. Durham is directly east of Toronto and has more room to grow and develop than Peel or Halton (the regions west of Toronto).
This level of growth is hard to ignore. Once again, for investors willing to hold properties and plan for 5, 10, or 15 years down the road, this is one area to consider. As more people arrive in Toronto and then eventually move out of the city, huge numbers are expected to flock to this region, creating great opportunities for those who own property there now.
Durham also unveiled its “Ready Set Future: Five Year Economic Development and Tourism Strategy and Action Plan” at the end of 2022, which comprises 71 action items focusing on attracting talented workers, augmenting 14 downtown areas in Durham, enhancing Durham’s reputation for innovation, and forming a clear identity for the region.
One of the major focuses will be on energy and automotive – building electric vehicles.
The region is an ideal location for many. It has easy access to Toronto with transit including the GO train, or via highway with Highway 401 and the 407 Express Toll Route running through it. Plus, the region is convenient for cottagers looking to take advantage of the beautiful Kawartha Lakes.
Now is the time to own good real estate in the Durham region as it is going to transform and grow denser!
Average House Price: $892,677
Hamilton continues to be one of the best places to invest in real estate in Ontario.
Like Toronto, Hamilton is also seeing a large growth in Tech workers. In 2022, Hamilton was ranked 4th fastest-growing tech talent city in North America. Also, the Conference Board of Canada named Hamilton one of the most diversified economies in Canada.
Hamilton has a large rental market with roughly 35% of households occupied by renters. Homes with secondary suites, or homes with the potential to easily add a secondary suite, are prime investments and are providing higher cash flow for investors in 2023.
In addition to secondary suites, homes that can add laneway units or garden suites are another hot commodity. While still relatively new, more infill projects adding these accessory dwelling units have been happening within the downtown core. Adding additional housing units to a property is a great way to boost monthly cash flow and create fantastic long-term value for your property.
Student rentals near Mohawk College and McMaster University have also done well historically. These are good cash flow producing properties. And with proper marketing and management, student rentals can be a fantastic addition to an investment portfolio.
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: $804,917
East Hamilton: $596,227
Hamilton Centre: $552,285
The Hamilton Mountain: $680,725
One of the hottest spots to invest in real estate in Ontario in 2023 is the Niagara Peninsula.
This region is sandwiched between Lake Ontario and Lake Erie. Boasting four border crossings into the U.S., and only an hour from Toronto, this is a key area of growth for Southern Ontario.
Demand is high in the region for good investment properties, but opportunities are still there for investors looking.
The Niagara Region has a newly approved growth strategy report. The report highlights the region’s desire to build more homes than the provincial growth projections require. They want to be proactive increasing supply ahead of the growing demand the region anticipates.
Source: Niagara Region Housing Affordability and Growth Plan 2051
The continued growth of the region has increased Metrolinx’s interest in further expansion of its GO Train services throughout the region. With stops already in Niagara Falls and St. Catharines, the GO has marked Grimsby and Lincoln as good future stops based on projected growth. the continuing expansion of GO train transit, Niagara has become an appealing option for many to buy and invest in.
Previously, St. Catharines was featured on our list of Best Places to Invest, and Welland made the cut in 2021. But more recently, the region as a whole has had so many hot pockets that investors have spilled over across the region and 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. We’ve also seen several investors pick up properties in Lincoln.
Vacancy rates remain low across the region. Good homes in good areas don’t tend to sit empty long.
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 2023!
Average House Price: $642,600
St. Catharines: $577,900
Welland: $524,900
Port Colborne: $526,300
Niagara Falls: $627,600
The Kitchener-Waterloo is yet again on our list of best places to invest in Ontario. In the last several years, the KW area has undergone a tech boom. Like Toronto, many 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, and that new jobs are outpacing applicants. With the massive growth in the tech market, Kitchener-Waterloo is attracting a lot of well-educated people.
In 2021, the Toronto-Waterloo Tech Corridor added 88,000 jobs. The area is growing 350% faster than Silicon Valley. And to that point, by early 2023, the Toronto-Waterloo Corridor is expected to have more tech workers than Silicon Valley.
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 between 2021-2026, and 305,000 by 2051 years (that’s like the current populations of Barrie and Guelph combined)!
Another benefit of Kitchener-Waterloo is on the far side of the Greenbelt, unlike many of the places on this list. This has allowed the city to expand to accommodate growth and will benefit this region in the years to come as they actively work 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.”
It is important 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, a criminal check by the landlord in the first 12 months, and plus yearly renewals.
Average House Price: $711,200
As with all of the cities on this best place to invest in real estate in Ontario 2023, Barrie continues to be a popular place for people looking to move out of the GTA, and gain access to “northern” living, while still being commutable into Toronto.
Barrie’s population has already started to dramatically grow in recent years, but it’s about to get turned up a notch. The province is expecting the city to grow by 20% between 2021 and 2026 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.
Barrie is also seeing the highest growth rate in renters in Ontario. Renter households grew by 47.7% from 2011-2021. This is good news for investors as there is a growing demand for good rental units in the city.
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% by 2026.
Only a 30-minute drive from Barrie, Orillia is located at the north end of Lake Simcoe, and we’ve seen more and more investors buying here in the last few years who are going to benefit from long-term growth!
Barrie: $702,243
Orillia: $555,409
Brantford has been a popular choice for families and investors over the last several years who are looking for a little more house and yard.
This is another city that’s expected to have above-average population growth in the next 30 years. Brantford is expected to grow by 56% in that time. Some of that is spillover from Hamilton, but with new job opportunities and good homes, Brantford is catching the eye of people from all over the Golden Horseshoe.
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: $680,150
London is exploding in Southern Ontario.
Located in southwest Ontario, halfway (200km) between Toronto and Detroit, Michigan, this city is part of Middlesex County, which is expected to grow as much as 42% in the next 25 years.
London 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.
Side Note: find out exactly what’s going on with the boom of international students coming into Ontario and the effect it’s having on housing in our “Ontario’s Population Explosion – The Untold Story" Report.
With London’s growing healthcare field and massive push for international students, London continues to be on our best places to invest in real estate in Ontario in 2023.
Average House Price: $615,247
Ontario is so far behind on our housing supply, and the economic climate isn’t speeding up new development. The government knows that new developments alone won’t be enough. We need to build more homes in our own backyards.
Reminder, it’s estimated that we need a million new homes in Ontario in the next 10 years to meet the anticipated population growth, yet we’re not even close to meeting that supply.
Second suites, garden suites, laneway houses, infill development. There are so many different ways single-family homes can capitalize on their existing footprint to add extra housing units. And adding units to your existing home or rental properties has proven to be one of the most profitable ways to invest in real estate in Ontario.
And the government is counting on average citizens to invest in real estate and 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.
The Ontario Government is currently working on ways to make it even easier for regular, small-time investors to be able to develop and add units to their properties.
We’ve had several industry experts join us on our Podcast, The Your Life! Your Terms! Show talking about these different types of projects. You can listen to those episodes below…
Craig Race - Laneway Housing Opportunities in Toronto, By-Laws, Garden Suites & Lanescape.ca
Andy Tran - Garden Suite Updates, Legal 2nd Suites & Investment Opportunities in Ontario
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 2023, 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.
Make 2023 your best year for investing in your future.
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 2022 here.
