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Canada Cap Rate Report Q3 2023

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Q1 2022 Cap Rate ReportHero

2023's earlier interest rate hike "pause" and a sense of optimism about rate cuts was reflected in the bond market, where rates remained below October 2022 levels for much of the first half of this year. However, rates have risen dramatically since then, and the cost of capital has become the major obstacle to completing deals.

  • The Canada five-year bond yield (used to benchmark many mortgage rates) rose a full 0.9% in Q3 2023, after declining slightly in Q2.
  • Apartment cap rates remain far lower than other assets, sometimes even below the risk-free rate of return. The meteoric rise in multifamily rents has thus far justified these valuations, as rents continue to reach record high levels across the country.
  • The fundamentals remain strong for real estate investment, as Canada continues to have a rapidly growing population, a strong labour market (unemployment has defied expectations and remained below 6% all year), and robust spending on retail and hospitality.

Canada Cap Rate Report Q3 2023

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Pour plus d’informations, veuillez contacter:

Vicente Gamboa

Associate Vice President

Toronto Downtown

Real estate professional with Toronto office of Colliers International Valuation and Advisory Services. Experience with valuation of wide range of property types including retail, industrial, office properties and large development sites. Work Experience includes appraisal and consulting assignments throughout Canada and Latin America. 

 

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Adam Jacobs

Head of Research | Canada

Toronto Downtown

Colliers Canada's head of research, leading a cross-country team of 20 mapping, analytics and research professionals. Formerly head of Canada research at Cushman Wakefield and Director of Analytics at Oxford Properties. Featured in mainstream publications such as the Toronto Star, industry publications and podcasts. Specializing in the big picture and the fundamentals driving real estate - demographics, the macro environment and the global economy. 

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