Here’s how much monthly rental profit the average GTA condo earns

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Written By: Neil Sharma
Source: https://www.canadianrealestatemagazine.ca/news/heres-how-much-monthly-rental-profit-the-average-gta-condo-earns-334628.aspx

The average GTA condo made a $63 monthly rental profit in 2020, according to a research report.

“Using payment data on all registered mortgage loans on rental units and adding in condo fees and property taxes, the average unit had ownership carrying costs of $2,077 per month. For these same units, the average achieved rent after completion was $2,140, leaving a small positive cash flow,” said the report from Urbanation’s Shaun Hildebrand, president of Urbanation, and Benjamin Tal, CIBC Capital Markets’ deputy chief economist.

Sixty-three percent of investors in the GTA were cash flow neutral or positive last year, up from 56% in 2017. Although using credit vehicles, including HELOCs, on title would slash the share of cash flow positive investors, the report noted that many investors don’t require mortgages at all. In fact, low interest rates mean that about half of mortgage payments during the first year go towards the principal on a 30-year amortization. For the average GTA investor—the average age of an investor who closed on a condo last year was 47—principal repayment becomes more favourable with each passing year.

Investors who purchased presale condo units fared better from a cash flow standpoint than landlords who bought resale units and leased them in 2020, with 80% of the latter becoming cash-flow negative.

“In fact, more than half of all condo investors were cash flow positive by up to $600 per month and less than 15% were cash-flow negative by more than $400 per month. Those that were cash-flow negative by $1,000 or more per month represented just 5% of investors.”

The average unit price was $415,175 with an 85% loan-to-value at closing, and among investors with positive cash flow, their average net income was close to $400, up from over $360 in 2017. However, larger units’ cash flowed negatively.

“In terms of unit type, there was a clear negative correlation between the size of the unit and the amount of cash flow, with studios performing best but still only representing 6% of the market. Only three-bedroom units had average negative cash flow, although these larger units comprised only 2% of rental investments.”

August Stats are Here!

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Hamilton, ON (September 3, 2019) – The REALTORS® Association of Hamilton-Burlington (RAHB) reported 1,067 sales of residential properties located within the RAHB market area were processed through the Multiple Listing Service® (MLS®) System in August 2019. August sales are down from July and June of this year, as well as August of 2018; however, the 2019 year-to-date number of sales is up 10.2 per cent over 2018. The average price for residential properties increased by 6.4 per cent from August 2018 to $599,589.

 

“The year-to-date number of sales is higher in 2019 compared to 2018 because we had a stronger spring,” says RAHB President Bob Van de Vrande. “If the average price continues to increase and inventory stays low, we may shift out of the balanced market we’ve been experiencing over the last year and a half as we move into a busy fall.”

The number of sales for detached single family properties within the entire RAHB market decreased by 0.7 per cent compared to the same month last year, and the average sale price increased by 5.7 per cent. Townhouse sales activity across the entire RAHB market area decreased from August 2018 by 1.7 per cent, and the average townhouse sale price increased by 10.4 per cent to $519,895. Apartment-style property sales increased by 14.6 per cent from August 2018, and the average price increased by 10.6 per cent.

 

“Single family homes, townhouses and apartment-style properties all saw increases in average price in each of our four main market areas in August 2019,” adds Van de Vrande. “But only apartment-style properties saw an increase in number of sales, which could indicate that buyers are continuing to choose more affordable options.”

Specific neighbourhoods within the overall RAHB market area see results that often differ from the average of the entire RAHB market area. Because neighbourhoods vary, determining the right price and conditions when buying or selling a property can be challenging. Local RAHB REALTORS® have the experience, knowledge and tools to help buyers and sellers make those big decisions.

 

*Average sale price can be useful in establishing long-term trends, but should not be used as an indicator that specific properties have increased or decreased in value. Talk to your local REALTOR®.

 

SOURCE: https://www.rahb.ca/rahb-realtors-release-august-statistics/

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Hamilton, ON (August 1, 2019) – The REALTORS® Association of Hamilton-Burlington (RAHB)reported 1,170 sales of residential properties located within the RAHB market area were processed through the Multiple Listing Service® (MLS®) System in July 2019. This is a 10.3 per cent increase from July last year; however, a 2.7 per cent decrease over June 2019 and a 12.9 per cent decrease from May 2019. The average price for residential properties increased by 0.9 per cent from July 2018 to $593,702.

 

“A yearly real estate cycle sees peaks in spring and fall, with a typically slower summer,” says RAHB President Bob Van de Vrande. “Average prices have stayed fairly stable since the spring high, which could point towards a healthy fall market when we could see the number of sales edge higher again.”

The number of sales for single family properties within the entire RAHB market increased by 13.1 per cent compared to the same month last year, and the average sale price increased by 7.2 per cent. Townhouse sales activity across the entire RAHB market area decreased from July 2018 by 4.5 per cent, and the average townhouse sale price increased by 1.8 per cent to $496,230. Apartment-style property sales increased by 38.5 per cent from July 2018, and the average price decreased by 8 per cent.

 

“Single family detached properties saw increases across both number of sales and average price; however, the most significant gain was in apartment-style condominiums,” says Van de Vrande. “An increase in sales of 38.5 per cent at a price point that is fairly stable, is a very affordable option for first-time home buyers and seniors looking to downsize.”

Specific neighbourhoods within the overall RAHB market area see results that often differ from the average of the entire RAHB market area. Because neighbourhoods vary, determining the right price and conditions when buying or selling a property can be challenging. Local RAHB REALTORS® have the experience, knowledge and tools to help buyers and sellers make those big decisions.

 

*Average sale price can be useful in establishing long-term trends, but should not be used as an indicator that specific properties have increased or decreased in value. Talk to your local REALTOR®.

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June Stats are Here!

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Hamilton, ON (July 2, 2019) – The REALTORS® Association of Hamilton-Burlington (RAHB) reported 1,203 sales of residential properties located within the RAHB market area were processed through the Multiple Listing Service® (MLS®) System in June 2019. This is a 4.2 per cent increase from June last year; however, a 10.5 per cent decrease over May 2019 and a 1.9 per cent decrease from April 2019. The average price for residential properties increased by 5.2 per cent from June 2018 to $593,549; however, decreased from May 2019 by 0.03 per cent.

“The number of sales and average price is up over 2018, showing that the market is edging higher since it balanced out last year,” says RAHB President Bob Van de Vrande. “Sales have dropped compared to May and April of this year, but paired with a decrease of about four per cent in the number of new listings this could indicate the market is tightening.”

The number of sales for single family properties within the entire RAHB market increased by 11.6 per cent compared to the same month last year, and the average sale price increased by 4.9 per cent. Townhouse sales activity across the entire RAHB market area decreased from June 2018 by 3.9 per cent, and the average townhouse sale price increased by 3.6 per cent to $499,523. Apartment-style property sales decreased by 8 per cent from June 2018, and the average price also decreased by 0.3 per cent.

“Only single family or detached homes saw an increase in average price and number of sales, which bucks the trend we’ve seen over the last year – buyers choosing more affordable options.” adds Van de Vrande. “Of course, this is an overall evaluation of our entire market area, and numbers can deviate from the average when we look at smaller or individual communities.”

Specific neighbourhoods within the overall RAHB market area see results that often differ from the average of the entire RAHB market area. Because neighbourhoods vary, determining the right price and conditions when buying or selling a property can be challenging. Local RAHB REALTORS® have the experience, knowledge and tools to help buyers and sellers make those big decisions.

*Average sale price can be useful in establishing long-term trends, but should not be used as an indicator that specific properties have increased or decreased in value. Talk to your local REALTOR®.

ORIGINAL ARTICLE: https://www.rahb.ca/rahb-realtors-release-june2019-statistics/

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