Canadian apartment building sales were trending downward last year with investors concerned about high unemployment numbers and tenants missing rent payments. However, 2021 has seen a shift in sales with demand for multi-family properties skyrocketing, despite COVID-19’s ongoing impact. Investors are snapping up multi-residential properties, especially older buildings, at a staggering rate.

The more recent vacancies these buildings have, the better, since this provides investors with the opportunity to increase lower rents, which have been rent controlled for years by provincial legislation, up to market rates. This demand has resulted in a significant increase in property prices with some buildings selling at capitalization rates as low as 2 percent.

On the other hand, demand for new rental properties is on the decline, partially due to a lack of international students coming into the major cities. To rectify this, the federal government has vowed to increase the number of immigrants coming to Canada over the next three years. This seems to be a reassuring move, especially for institutional buyers, who are already planning their purchases for the next few years.