Year End Multifamily Report Available

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Spoiler alert - interest rates had big impact. That said - fundamentals remain strong.

February 2, 2024

Read Time: 2 minutes

Today we release our 2023 multifamily report for the GTA.

Spoiler alert - interest rates had an impact.

KEY HIGHLIGHTS:

Average Cap Rate: 3.8% (↑ 77 bps from 2022)

Transaction Volume: $1.12 Bn (↓ 51.2% from 2022)

Average Price Per Unit: $315,090 (↓ 11.3 from 2022)

Average Two Bedroom Rent: $1,940 (↑ 8.7% from 2022)

Average Turnover: 8.3% (↓ from 9.8% in 2022)

Average Vacancy: 1.5% (↓ from 1.7% in 2022)

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](https://mcusercontent.com/87232bcc93f1dd394870ffcbd/files/029a395e-ba0f-6d80-2323-eabe28f7a5ac/Dayma_Itamunoala_GTA_Multifamily_MR_2023YIR.pdf)

You can download the full report by clicking [here](https://mcusercontent.com/87232bcc93f1dd394870ffcbd/files/029a395e-ba0f-6d80-2323-eabe28f7a5ac/Dayma_Itamunoala_GTA_Multifamily_MR_2023YIR.pdf).

But I also want to share some less obvious takeaways.

1/ Interest Rates:

Higher interest rates made it harder to transact last year. But rate volatility was also a big factor. Picture the buyer who was about to waive their conditions - then BAM - rates jumped 40 bps. There were a lot of dropped deals last year for this reason. With inflation largely tempered, there's more certainty. As a result, we anticipate higher deal volume in 2024.

2/ ZIRP Era is Over:

Don't get me wrong - I'm a (big-time) multifamily bull. But unfortunately, we won't see asset values rocketing up like we did during zero interest rate policy days. $315,000 a door to $350,000 to $400,000 seemingly overnight? This was always unsustainable. Instead, I predict a more tempered upward value trajectory - based on strong fundamentals rather than interest rates. This is healthy for our market.

3/ Building Multifamily:

Few people understand apartment construction well. But with the Apartment Loan and Construction Program (formerly RCFI) and other government support - there is a growing amount of hype. Many of our clients are getting smarter in this category. We expect more construction to follow.

4/ Team Plug

Our team is having a very active start to the year. We have new listings and buyer mandates. Most importantly - we want to work with you. Please give us a call to see how we can help.

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