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Toronto Income Property Market Analysis Fall 2020

Relevant duplex, triplex, and multiplex sales from the past 90 days

Are the first negative signs of this extended pandemic starting to show in the GTA income property market? Interest rates remain competitive. Condos numbers are down a little. Landlords who relied on AirBnB income are in a jam. The rental market may be easing up a little so is this going to ultimately slow the sales of duplexes and multiplexes?

Here is some interesting data from the past 90 days of income properties sales in the city:

In the central neighbourhoods of Toronto (C01,C02,C04,C08, C09), there were 34 sales of properties with at least three kitchens. The average sale price of these income properties in downtown Toronto is now over two million dollars. In most cases, properties sold for the asking price or slightly above. They also still tend to sell quite quickly, often within ten days. This shows us that despite rental concerns, buyers are still interested in income-generating properties for the long-term benefits.

On the west side, (W01,W02,W03), there were 17 sales with an average sale price of just under $1.9M. Like downtown, these properties are selling quickly and many times for over the list price. There does not appear to be a slow down here either.

Coincidentally, there were also 17 sales on the east side of the city (E01,E02,E03). The average price was about $50K less than properties on the west side, but these were all fairly quick trades, often at asking price or better. The data here also confirms that income property sales are alive and well in the east neighbourhoods as well.

We do not have reliable cap rate data on these sales, so it is hard to say if the yearly returns on these properties are going up. I am still advising my clients to pursue break-even investment properties with 4 caps or better. There have been many sales over the past few years where the numbers were not as strong so we may be heading to better returns for new landlords. The pent-up demand for income properties from the spring still exists and with more potential inventory on the market, this demand will be continue to be satisfied.

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