Best Places to Invest in 2025 in Ontario Canada

The Canadian real estate market continues to evolve annually, and as of January 2025, mortgage rates are adjusting based on the type of loan and term. Typically, rates are slightly higher, with the average 5-year fixed rate at approximately 5.05% and as low as 4.04%. Economic forecasts anticipate a potential decline in rates throughout 2025, driven by adjustments in the Bank of Canada’s policy rate, which is influenced by various economic indicators such as inflation and growth rates. This scenario suggests a favorable future for investors, particularly in identifying prime areas for Short-Term Rentals (STR) in Ontario.

Below is a chart listing the top 10 places to invest in Ontario, taking into account bylaws, occupancy rates, estimated revenue, and tourism. Generally, urban locations are more favorable due to the higher influx of visitors compared to more seasonal rural locations; however, urban areas often face stricter regulations that can be less advantageous for STR investments.

Data based from AirDnA*

The data indicates that locations with a high market score typically yield higher yearly revenue with the right management, property, and service strategy. However, our observations have consistently shown that properties offering unique experiences tend to perform well in the market, regardless of location. Today, for those investing in Ontario, we recommend focusing on properties that are distinctive or have the potential to be transformed in this way, especially those near tourist attractions. Locations like Centre Wellington, Dysart et Al, and the outskirts of Ottawa are prime examples.

This overview highlights that while urban locations generally offer more consistent visitor traffic and potentially less regulatory hassle, the chosen areas—Centre Wellington, Dysart et Al, and the outskirts of Ottawa—demonstrate significant investment potential based on their unique characteristics and market dynamics. Here is a more detailed look at each:

Centre Wellington

Economic Drivers: Centre Wellington is a burgeoning hub for agribusiness and manufacturing, making it attractive for investments that cater to professionals in these sectors. The region is also seeing growth in the tourism sector, particularly eco-tourism and heritage tourism, which supports short-term rental investments.

Demographic Trends: The area is experiencing a steady population growth, particularly among families and retirees, attracted by its lower cost of living compared to major urban centers and its high quality of life.

Infrastructure: Excellent road networks and proximity to major highways such as the 401 make it easily accessible. Ongoing improvements in local amenities, including healthcare facilities and schools, enhance its appeal as a residential and investment destination.

Risk Assessment: Investors should be aware of the dependency on the agricultural sector, which might be susceptible to fluctuations based on environmental factors and international trade policies.

Downtown Elora

Dysart et Al

Economic Drivers: This area is known for its vibrant arts community and outdoor recreational activities, including hiking, fishing, and boating, making it a prime location for tourism-related investments.

Demographic Trends: It attracts a mix of seasonal and permanent residents, including a significant number of retirees and vacation home owners, which sustains demand for short-term rentals.

Infrastructure: While more remote, the region benefits from its natural landscapes, which are a major draw. Efforts to enhance digital connectivity and road infrastructure are ongoing, which is crucial for attracting longer-term residents and tourists.

Risk Assessment: The seasonal nature of tourism can lead to fluctuating rental incomes. Additionally, environmental regulations could impact property development and use, which investors need to consider.

Kenesis Lake

Outskirts of Ottawa

Economic Drivers: Being near the capital, this area benefits from spill-over effects of governmental and tech sector growth. It serves as a quieter alternative to downtown Ottawa, with good accessibility to urban job markets.

Demographic Trends: The outskirts are popular among young families and professionals looking for more affordable housing options compared to the city center, boosting demand for both long-term and short-term housing.

Infrastructure: Strong public transport links to central Ottawa, including planned extensions of the O-Train system, and well-maintained road networks enhance its connectivity. The presence of good schools and hospitals also adds to its residential appeal.

Risk Assessment: As a rapidly developing area, there is a risk of potential over-development, which could affect future property values. Additionally, changes in government policies related to housing and development could impact investment outcomes.

The key takeaway from these analyses is that while market dynamics and economic drivers are critical, the unique appeal of a property can significantly enhance its attractiveness, investment return and can significantly influence occupancy rates, particularly in strategic locations such as Centre Wellington, Dysart et Al, and the outskirts of Ottawa. Embodying the Starbucks motto, "If you build it, they will come," properties that stand out due to unique features or exceptional experiences can draw visitors despite their location. Investing in properties that offer something truly special, whether it’s through unique design, unmatched amenities, or a breathtaking location, can create a compelling draw that transcends typical market constraints. Such properties not only promise higher returns but also offer a resilient appeal that can withstand varying economic conditions.