Before diving into the best places to invest in real estate in Ontario in 2024, you need to understand that the real estate market looks different in 2024 than it has in recent years.
Gone are the days when everyone and their brother were trying to scoop up every property possible because they could see prices seemingly double overnight.
Gone are the days when you had a lineup of people banging on your door willing to pay a year’s rent (above asking) if you’d let them lease the unit.
When interest rates were at their bottom and prices were spiking, “investors” were getting lucky.
They were jumping on the bandwagon when they had no understanding of the ins and outs of investment real estate.
It led to many accidental landlords who had short-term gains but didn’t know how to deal with (and avoid) problems.
When interest rates quickly went up, people were stuck because they hadn’t entered with a plan or an exit strategy. This caused some people to get burnt. These are inevitably the stories you’ll hear about every time you bring up investment properties to someone in Southern Ontario for the next several years.
Investing in real estate in Ontario isn’t foolproof…
But that doesn’t mean that 2024 is a bad time to own real estate.
In fact, 2024 is a fantastic time to start or grow a portfolio of properties, if you’re willing to put in the time and effort and use reliable strategies to invest in real estate.
Interest rates were low for a long time in Canada. And when COVID hit in 2020, rates were at record lows, making borrowing cheap.
Then, rates went up repeatedly in a short amount of time.
This significantly increased carrying costs for those who’d racked up debt.
As mentioned above, this led to many unprepared and untrained new “investors” into hot water.
At the end of 2023, the Bank of Canada and other international banks hinted that rate hikes could be at an end, and rates could drop soon.
2024 kicked off on the right foot for mortgage rates. Fixed-rate mortgages started to drop in the first few days of 2024, and variable rates are expected to follow suit.
Where rates go this year is far from certain. But because lower rates help with carrying costs, that’s what too many people are going to focus on this year when they consider investing in real estate in Ontario.
The problem is that people were ignoring the fundamentals, buying good homes in good areas. This is key to long-term success and weathering unpredictable economic times.
Don’t get into the business of running a slum.
Good homes (in good areas) attract better-quality tenants and generate better rental income.
We're talking about clean, well-cared-for homes. We're not necessarily talking high-end luxury but these are homes that have above-basic finishes with careful thought to making the tenant's home more comfortable.
This generally leads to fewer issues and headaches over the years.
Yes, you can buy a fixer-upper and invest money to fix it up, but do your due diligence because these projects can quickly escalate and many investors have found themselves holding a money pit that dragged them down.
One of the first factors for success is picking the right location.
Ontario is a great place to invest in real estate. There are plenty of opportunities, and there are investor groups that can assist you throughout your journey.
There’s no “one” right place, but there are a few main criteria we use when determining if a city/neighbourhood is a good investment opportunity.
Why try to create demand when you can you could just go to an area with a growing demand.
Before you invest in an area, consider what the population growth of the neighbourhood looks like. Are people moving in or moving out? Better yet, are people moving there at a higher rate than the provincial average? You can find these numbers on the Stats Canada website. It will take minimal investigating, and it’ll go a long way to telling you if a neighbourhood is worth looking at.
Another aspect of demand comes from the type of property you’re looking to invest in. If you’re looking to own student rentals, proximity to campus and transit are key features that will increase the number of potential tenants.
Starter homes are another property type that is in consistent demand. While a starter home may look different in different communities, there’s a higher need for these types of properties.
Now, in Southern Ontario, housing demand isn’t in short supply. The province is laughably behind its own goals for housing completions. Check out this chart put together by Mike Moffatt:
As of 2020, we weren’t even building half the houses we needed to be annually. This number picked up a bit in 2023 but Ontario also saw far higher population growth than expected.
In the span of a year, Ontario had to increase our population projections by 700,000.
How many more homes do we need to make up that difference?
Our population is growing like never before. Here's another chart shared by Mike Moffatt looking at Canada's net population growth in the last 8 years compared to the previous 40 years…
With this kind of population growth and slow housing starts, Southern Ontario is filled with communities packed with demand for good housing.
Income is a big indicator of the prosperity of a neighbourhood. Generally, higher household incomes mean strong job diversity in the area, a solid local economy, and a greater “staying power.”
You want to make your investments as simple as possible, and an area with multiple sources of employment creates a healthy and active real estate market. It provides a good base of tenants, first-time buyers, and “move up” buyers.
This is another thing you can figure out by looking at Stats Canada. Many real estate apps also offer quick demographic insights into the local region.
In addition to higher income, new job growth is another great indicator of a good area to buy. New factories, schools, hospitals, large commercial businesses, etc. They can bring thousands of jobs to an area which can snowball growth and demand for good homes from the people who are going to fill these new roles. On the flip side, when you see major employers closing and moving out, it’s maybe not the best time to invest in that neighbourhood.
Is the city investing money in the neighbourhood? If so, that’s a great sign. Infrastructure improvements are good indicators of increasing demand and value. Small projects like cleaning up streets and parks, repairing roads, to large investments like adding transit, sewage work, hospitals, etc. are all things to look out for when searching for an area to invest.
Many towns and cities will list their upcoming projects for the next 5-10 years and you can find areas where they’re focusing money and making improvements. That said, if an area is already in good condition and well-maintained, that’s great. But if the area is worn and looking neglected, and the town has no plans for major repairs, it may not be the best spot to buy.
There are many “target areas” for you to choose from. And as long as you remember to focus on growing demand (population), higher than-average income (diverse employment), and new transportation and infrastructure projects you are setting yourself up for success.
Once again, the Niagara Peninsula is seeing a lot of love from investors we’re working with, and maintains its spot on our list of best places to invest in real estate in Ontario in 2024.
The price point for good homes in good areas in the region is generally more accessible to new investors looking to get into the market and grow their portfolio, while still generating solid monthly rental incomes.
One of the reasons that the Niagara region is still in high demand is because of the location. The Niagara Peninsula is one of the major gateways from the United States to Canada. Sandwiched between Lake Ontario and Lake Erie, with four border crossings, and only an hour from Toronto, this is a key area of growth for Southern Ontario.
There are a few types of properties that are popular with investors in Niagara. One of the most popular are homes in the North End of St. Catharines with a side or rear entrance to a basement with good ceiling height that can be fairly straightforward to convert into a legal separate basement unit. Basement conversions are generally the easiest way to increase the number of rental units and also increase the possible income from the home.
Duplexes and triplexes are popular with many investors looking in Welland. Often these units have the potential for updates when vacant and can demand higher rents upon refill.
Student rentals are also popular for investors looking to house students from Brock University and Niagara College. Homes that have easy potential to add additional bedrooms are a big plus. Watch how a couple of investors recently searched Niagara for the ideal student rental opportunity here, and how they completed that renovation here.
Last year, the Niagara Region approved a new growth strategy report. It highlights Niagara’s goal to build more homes than the provincial growth projections require (something the province is far behind on meeting). Niagara is working to proactively increase supply ahead of the growing demand the region anticipates.
Source: Niagara Region Housing Affordability and Growth Plan 2051
Metrolinx has a presence in the region for commuters, though infrequent at this point. In the last few years, the region has seen more commuters move in, but the majority of rental demand still comes from people working or studying in the region.
Demand for good homes is still there, though it has calmed from its peak a few years ago. However, good units in good areas have continuously filled and been solid long-term assets for many investors.
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 2024!
Hamilton, aka the Hammer, has been a very popular location for investors for a good 15 years at this point. It’s gone from a hidden secret to the it place to invest, and has now stabilized as a solid and reliable place many investors continue to find great success, which is why it’s once again on our list of one of the best places to invest in real estate in Ontario.
And Hamilton is growing. In 2023 Hamilton set a new record for the number of building permits (residential and commercial) and the value spent on construction. With the province so far behind on creating new housing, we could always want more, but seeing Hamilton building momentum is a good sign.
Over the last few years, Hamilton haw seen 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 maintains a large rental market with roughly 35% of households occupied by renters. Duplexes, homes with the potential to easily add a secondary suite, and properties prime for laneway or garden suite units are providing higher cash flow for investors in 2024.
Student rentals are another popular choice with investors for their higher cash flow numbers. Properties near Mohawk College and McMaster University have done well historically. With proper marketing and management, student rentals can be a fantastic addition to an investment portfolio.
Hamilton is a large city with distinct pockets. East or West, on the Mountain or Downtown makes a big difference. Different investing strategies work in different areas. If you’re interested in investing in Hamilton, it’s important to work with a seasoned investor who knows the city so you can leverage their experience for your own success.
The big talk with investors in London is around student housing.
Student rentals have had massive demand in the last couple of years at around Western University.
Both Fanshawe College and Western University are “actively recruiting” international students. This growth may plateau, but good units have been filling year-round. We’ve seen several luxury units renting for over $1,000 a room, even as high as $1,250/room. While this is on the high end, London is still seeing record-high student rental prices.
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. Before 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 leaping 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 2024 list.
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.
South of London, St. Thomas Ontario is seeing a boom too.
Initially, this town of about 30,000 people saw spillover growth from London. Now, Volkswagen has announced a $16.3 billion battery plant in St. Thomas, anticipated to open in 2027. The province anticipates this to bring in thousands of jobs for the region, which could spin off into tens of thousands of opportunities as more businesses move into the area.
Barrie continues to be a popular place for people looking to move out of the GTA. North of Toronto, Barrie has the charm of “northern” living, while still being commutable into Toronto.
Barrie’s population is seeing dramatic growth recently, and it’s expected to ramp up from here. 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 took an early initiative in embracing Accessory Dwelling Units (ADU) to be added to residential properties. It was a smart move, especially with a population boom on the horizon. Now, homeowners can go from having a single-unit home to adding a legit extra space in the basement and a detached ADU in the backyard. It's like turning one residential unit into three – pretty cool, right? This isn't just about accommodating growth; for investors, it means adding more doors to your portfolio, and that's a big win. Three units in one property can bring in more cash than a regular old single home.
For folks looking to invest, and are willing to search for the right property and put in some money and work to add units, it can be a real game-changer. It's all about finding those opportunities – the kind that could pay off big time in the long run.
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.
Toronto, and the GTA as a whole can’t be left off of our list of the best places to invest in real estate in 2024 in Ontario. The GTA is not only the most populous area in the country, but it’s also the entry point for many newcomers who come into the province.
Toronto has had considerable spillover due to the rapid influx of Canada’s population. Yes, people are moving out of Toronto into towns and cities across the Greater Golden Horseshoe. No, Toronto isn’t shrinking or at risk of a declining population any time soon.
Toronto will continue to have turnover as newcomers get settled and move out to neighbouring towns and cities. However, given Canada’s immigration forecasts, there will be a continuous influx of demand moving into the area.
Toronto will continue to be the heart of the province.
Toronto scored 5th in North America in the 2023 Tech Talent Report released by CBRE, only behind the San Francisco Bay Area, Seattle, New York, and D.C.. Toronto had the highest number of tech jobs added since 2018. Plus Toronto has the most tech position openings compared to tech grads in the same area, which means there are a lot of jobs up for people who graduated outside of Toronto and are willing to move to the city. 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 2024.
This is far from an exhaustive list. Investors are having great success in Brantford, Guelph, Kitchener-Waterloo and Cambridge, Durham, Peterborough, and many other great places in Ontario. The key to investing in 2024 is the same as any other year, find good homes in good areas with above-average demand.
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 2024, 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 60-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 2024 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 2023 here.
