Ontario’s real estate market continues to evolve in 2025, presenting both challenges and opportunities for investors. With affordability pressures in the Greater Toronto Area (GTA), many rental investors are looking to secondary and regional markets that combine reasonable entry costs with strong tenant demand.
At Martin Group, we analyzed Ontario markets using four key criteria:
-
Housing Affordability – the cost of acquiring an investment property
-
Rental Rates – monthly income potential
-
Vacancy & Demand – stability of the rental market
-
Long-Term Growth – future potential driven by economic and infrastructure projects
Our findings highlight where investors can maximize returns, whether their focus is on cash flow, appreciation, or a balanced approach.
Best Cash Flow Markets
The strongest rental cash flow opportunities can be found in Northern Ontario, where property prices are significantly lower than in southern markets, and rental demand remains steady.
-
Sault Ste. Marie (~3.79% ROI) – Lowest entry costs with consistent rental demand
-
Thunder Bay (~3.76% ROI) – High yield with modest long-term appreciation potential
-
North Bay (~3.64% ROI) – Supported by student and healthcare tenant bases
-
Sudbury (~3.57% ROI) – Diversified economy including mining, healthcare, and education
These cities are ideal for investors who prioritize monthly income and stronger yield potential.
Best Long-Term Growth Markets
For investors focused on appreciation and market stability, Ontario’s larger metropolitan centres stand out. These markets offer moderate ROI but strong fundamentals that support property value growth over time.
-
Ottawa (~3.28% ROI) – Anchored by government and tech employment
-
Hamilton (~2.35% ROI) – Diversifying economy and LRT infrastructure investment
-
Kitchener-Waterloo (~2.61% ROI) – Tech hub with strong student demand
-
Kingston (~3.10% ROI) – Stable, student-driven rental market
These cities are attractive for investors seeking reliable demand and future upside, even if immediate cash flow is lower.
Best Balanced Markets
Some cities strike a balance between affordability and growth, providing investors with both income and long-term appreciation potential.
-
London (~2.63% ROI) – Affordable housing, strong university and healthcare sectors, and consistent rental demand
-
Windsor (~2.44% ROI) – Low entry costs, cross-border location, and major infrastructure investments fueling growth
These markets are especially attractive for investors who want a mix of income and appreciation.
Strategic Recommendations
-
Income-Focused Investors: Prioritize Northern Ontario (Sault Ste. Marie, Thunder Bay, North Bay, Sudbury) for the strongest cash flow.
-
Growth-Focused Investors: Target Ottawa, Hamilton, Kitchener-Waterloo, or Kingston for stable appreciation.
-
Balanced Portfolios: Begin with London or Windsor and complement with either a high-yield or growth market property.
-
Diversification Strategy: A well-rounded portfolio should include one high cash-flow property and one long-term growth property to mitigate risk while maximizing returns.
Final Thoughts
Ontario’s rental market in 2025 remains full of opportunity. By carefully selecting markets that align with your investment goals, whether it’s immediate income, long-term growth, or both you can build a portfolio that delivers results now and well into the future.
At Martin Group, we’re here to guide you through the numbers, the strategies, and the opportunities. If you’d like to discuss which market best fits your investment goals, we’d be happy to connect.
