London Apartment Market Report 2019
Demand continues to remain strong for multi-family assets in Southwestern Ontario with the price per suite continuing to rise for this asset class.
- While cap rates may be stabilizing, the desire for a buyer to secure a relatively secure cash flow investment will keep cap rates at historic lows
- While "value add" for the buyer is harder to realize, retail increases tied to inflation make income producing assets well positioned to keep generating demand
- As of right zoning and densification are important factors when considering the value of an asset
- New supply will help to alleviate some of the supply issues and there has been an increase in planned purpose built apartments in London
- Smaller towns surrounding larger centres saw new builds completed in 2018
- With the high costs of construction and long approval times for new projects, an existing cash-producing asset still outweigh or at least rival the benefits of a new build