(Note: This was written the week of August 10th. Since then the tariff deadline has been extended 3 days).
Between August 2024 and July 2026, 136 apartment buildings changed hands across Southwestern Ontario, from Windsor to Woodstock and Sarnia to Stratford. Together they represent $932.0 million of disclosed volume and 6,508 units. This is what those buildings actually sold for, what is driving demand underneath the pricing, and what changed in the rules while you were busy running your buildings.
The short version: transaction activity and pricing are both up, and the rental fundamentals underneath them are not. That gap is the whole story of this market right now, and it is about to be tested by two things nobody was talking about a year ago. One is a labour market reversal that has quietly made London the softest major market in Ontario. The other lands on August 19th.
What apartment buildings are selling for in Southwestern Ontario
Apartment buildings in Southwestern Ontario are trading at a median of $160,690 per unit and $205.80 per square foot. The full range across 109 verified single-asset sales runs from $57,692 to $893,033 per unit. Where a capitalisation rate was disclosed, and that was on only 23 of the 136 sales, the median was 6.00%. The median transaction was $2,650,000.
Activity is up on every measure. In the twelve months to July 2026 there were 73 sales worth $502.6 million. In the twelve months before that, 63 sales worth $429.4 million. That is 15.9% more transactions and 17.0% more dollars. The median price per unit rose 6.2%, from $156,875 to $166,667, and on a per square foot basis 12.0%.
For comparison, my Waterloo Region multifamily market (/landlord-update-waterloo-region-summer-2026/) update covered 46 properties and $121 million over a shorter window. The wider region is a bigger and slower market with more room in the pricing.
Price per unit by city and county
London commands the highest per-unit pricing of the three major centres at $175,915, roughly 16% above Windsor and 24% above Sarnia. That ordering holds on a per square foot basis too, so it is not an artefact of unit sizes.
Below the three big markets, the counties tell a more useful story than the cities, because a single sale in a small town moves a city median and a county median absorbs it. Perth County, covering Stratford and St Marys, is the strongest at $204,167 per unit across six sales. Oxford County, covering Woodstock and Tillsonburg, sits at $200,556. Elgin, covering St Thomas and Aylmer, is $187,121 across nine sales. Middlesex is $175,000 across 39. Essex, which is Windsor and the county towns, is $154,839 across 29. Lambton is $141,477 across 16. Chatham-Kent is the value end of the region at $105,000 per unit, though on only three sales.
The largest transaction in the two-year record was 8607 to 8699 McHugh Street in Windsor, 232 units built in 2023, which Skyline Apartment REIT bought for $107,900,000 in May 2025. That works out to $465,086 per unit, and it is a useful reminder that new stock in Windsor prices like a different asset class than the 1960s walk-ups down the road. The second largest was 1126 to 1154 Adelaide Street North in London, 558 units, $102,500,000 to Pier 4 REIT in February 2026, at $183,692 per unit.
The 7 to 12 unit discount
This is the most useful thing in the data and almost nobody talks about it. Buildings of 7 to 12 units are the cheapest way into this market on a per-unit basis. Not the smallest buildings. The 1 to 6 unit band actually carries the highest median price per unit at $194,167 and by far the highest per square foot at $288.62, because those buildings compete with residential buyers and get financed on residential-style terms.
Buildings in the 7 to 12 range fall between two markets. Too large for the residential lender, too small for an institution to bother with, and too small to justify professional third-party management. The result is a median of $145,000 per unit. For an owner-operator with the capacity to self-manage and a lender relationship on the commercial side, that is where the arithmetic works hardest.
It is also not a one-year fluke. That band rose 13.1% year over year on 19 trailing-period sales, which is one of the better-supported figures in this entire dataset.
Three of the four size bands rose. The only band that did not was 25 units and up, down 4.2% on 17 sales. That is worth watching. It is the band institutions actually compete for, and it is the band where the buyer pool is most sensitive to interest rates and to the vacancy picture below.
The employment reversal: London and Windsor have traded places
A year ago Windsor had the highest unemployment rate of any city in Canada at 10.2%. As of the Labour Force Survey released on 7 August 2026, Windsor is at 7.6% and London is at 8.2%, the weakest labour market in Ontario and the fourth weakest in the country. London briefly held the outright worst position nationally in March 2026 at 9.1%.
If you own buildings in London and you have been assuming it is the safe, diversified market and Windsor is the risky auto town, that assumption is now a year out of date.
Why London softened
Two things happened at once. The goods-producing sector shed roughly 5,900 positions in 2025 on the back of US tariffs, and manufacturing is 10 to 12% of the local economy. Autoneum closed its London plant in January 2026, taking more than 130 jobs, and Unifor put that closure directly on tariffs. Thirty kilometres east, GM permanently cancelled BrightDrop production at CAMI in Ingersoll in October 2025, affecting more than 1,000 workers.
At the same time the student base collapsed. Fanshawe College issued 11,706 study permits in 2023 and now has roughly 4,200 international students. It is closing its London South Campus on 1 September 2026, has already cut 40 programs and is reducing its workforce by 35%. The federal study permit target went from 305,900 to 155,000. CMHC named both the manufacturing losses and the enrolment drop when it explained London hitting a fifteen-year vacancy high.
Why Windsor improving is not the good news it looks like
Here is the part that matters if you own there. Windsor genuinely added jobs: Stellantis launched a third shift at Windsor Assembly in February 2026 with more than 1,700 employees, and the NextStar battery plant added 1,300 and has since diversified into grid-scale storage. The Gordie Howe International Bridge opened on 27 July 2026.
But a large part of the rate decline is arithmetic, not hiring. In April 2026 the rate fell from 8.5% to 8.1% while the labour force shrank by roughly 3,700 people in a single month. CMHC's regional economist said plainly that many laid-off workers moved to provinces like Alberta. CTV reported in June that private sector employment was still contracting while public administration and self-employment grew.
A falling unemployment rate caused by people leaving town is bad for rental demand, not good. Fewer people is fewer tenants regardless of what the percentage does. If you are underwriting a Windsor building on the improving headline number, underwrite the population number instead.
Vacancy and rents across Southwestern Ontario
London at 4.0% is the highest vacancy the market has recorded in fifteen years, up from 2.9% a year earlier. Windsor moved from 3.3% to 3.7%. Average two-bedroom rent is $1,651 in London and $1,454 in Windsor.
Pay attention to how rent growth is measured. London's published average two-bedroom rent went from $1,548 to $1,651, which looks like 6.7%. CMHC's same-sample figure, which compares the same buildings year over year, is 4.1%. The difference is new supply pulling the raw average up. The same-sample number is the one that reflects what an existing landlord can actually achieve, and it is the one to underwrite on.
The turnover valve is closing
For owners of rent-controlled stock, tenant turnover has always been the release valve. A below-market unit resets to market when someone moves out. CMHC recorded a slight decline in average two-bedroom turnover rents in the London area in 2025, and national turnover rent growth fell to 8.7% from 23.5% the year before.
A pro forma built on large mark-to-market gains at turnover is the most likely way to lose money in this market over the next several years. That assumption worked from 2021 to 2023. On the most recent CMHC survey it no longer holds in London.
Demand is unlikely to bail you out. The federal Immigration Levels Plan holds permanent residents flat at 380,000 a year through 2028 while capping new student arrivals at 155,000 in 2026, falling to 150,000. Canada's non-permanent resident population fell 4.4% in the first quarter of 2026 alone. Those are precisely the tenants who fill entry-level and student-adjacent stock.
The trade risk that lands on 19 August
On 19 August 2026, new United States tariffs of 50% take effect on a list of Canadian goods under Section 338 of the Tariff Act of 1930, a statute no president had used before. Two features make this different from everything in the trade file since 2025.
First, the rate stacks on top of existing duties. Second, and this is the part that has not sunk in locally, CUSMA compliance does not exempt you. Every prior tariff programme carved out CUSMA-qualifying goods. This one does not.
Autos and auto parts are excluded, because they sit under a separate Section 232 regime where CUSMA-compliant vehicles still get a US-content carve-out. That protects Windsor Assembly. What the list does cover is chemicals, plastics, rubber, machinery, electrical equipment, furniture, lighting, pulp and paper and wood products. In this region that reads as Sarnia's Chemical Valley and the tooling, plastics and moulding shops that feed Windsor's auto plants.
CUSMA did not die, but it did not renew either
At the joint review on 1 July 2026, Canada and Mexico both supported a sixteen-year extension. The United States declined. The agreement stays fully in force to 2036, but it now triggers a mandatory review every single year until then. The US is pushing to raise the auto regional value content requirement from 75% to 82% and to add a 50% US-specific content floor, which would hit Canadian assembly directly. Nothing has been adopted, and Mexico is opposed.
For a landlord this is not an abstraction. If you are underwriting a five or ten year hold in Windsor, Sarnia or Chatham-Kent, you are underwriting an annual political negotiation over the employment base of your tenants. That is a real risk premium and it belongs in your cap rate.
What changed for Ontario landlords in 2026 and 2027
The 2027 rent increase guideline is 1.9%
Ontario has set the 2027 guideline at 1.9%, down from 2.1% in 2026 and from 2.5% in each of 2023, 2024 and 2025. It is the lowest figure since 2022, when the guideline was 1.2%.
Bill 60 and the Landlord and Tenant Board changes
Bill 60, the Fighting Delays, Building Faster Act, received Royal Assent on 27 November 2025. A package of procedural changes took effect on 1 July 2026:
- The deadline to request a review of an order dropped from 30 days to 15 days.
- Above-guideline increase orders must now be served within 7 days of issuance, down from 14, with the certificate of service due within 5 days of service.
- Maximum fines under section 236 of the Residential Tenancies Act doubled, to $100,000 for an individual and $500,000 for a corporation.
- A mandatory payment agreement form is now required under section 206.
- New rules govern air conditioner installation and the seasonal charge a landlord may apply where electricity is included in rent.
The seven-day above-guideline service window deserves particular attention. Miss it on an order that took a year to obtain and you lose the benefit of it.
A second tranche is scheduled for September 2026 and is reported to include changes to notice periods for non-payment of rent and to the compensation payable on a notice for the landlord's own use. Those are not in force yet. Tribunals Ontario has confirmed the July package and said other provisions take effect in September without itemising them. Confirm current requirements with the Board or with counsel before serving anything.
Which buildings are exempt from rent control in Ontario
A rental unit is exempt from Ontario's annual rent increase guideline if it was first occupied for residential purposes after 15 November 2018. For exempt units a landlord may raise rent by any amount between tenancies and, with proper notice, during a tenancy. Units first occupied on or before that date remain subject to the guideline.
That one date splits the region's apartment stock into two assets with entirely different growth profiles, and the transaction record shows buyers pricing the difference.
The six exempt buildings that traded were 30 Queensland Road in Stratford at $438,667 per unit, 8607 to 8699 McHugh Street in Windsor at $465,086, 228 McConnell Street in Exeter at $322,581, 1061 Richmond Street in London at $322,222, 478 Janette Avenue in Windsor at $279,167 and 25 Centre Street in London at $176,829.
If you own post-2018 stock, that exemption is the single most valuable feature of your asset and it should be central to how the building is presented to a buyer.
Who is buying and who is selling
Nearly half of all recorded buyers were private individuals. This is not an institutional market below roughly $10 million, but it is not free of institutions either. Skyline Apartment REIT, Canadian Apartment Properties REIT, Chartwell Retirement Residences, Pier 4 REIT and Ravelin Properties REIT all appear in the record, and nine of the 19 REIT purchases closed under $10 million.
More than half of sellers had owned for over twenty years
Hold period was recorded on 121 of the 136 sales. Of those, 65 had been held for more than twenty years. That is 54% of sales with a recorded hold period, and 48% of the full dataset.
This is generational turnover, not opportunistic trading. Owners who bought in the 1990s or earlier are hitting retirement, facing succession decisions, or deciding that the regulatory and capital burden of ageing Class C stock is no longer worth carrying. And it is ageing stock: 104 of the 134 sales with a recorded class were Class C, and the median building in every size band under 25 units dates from around 1960.
For a buyer, a twenty-year owner is a specific and repeatable opportunity. Those buildings reliably carry below-market rents, deferred capital, informal record-keeping and no professional management. All four depress the price a sophisticated buyer has to pay, and all four are fixable.
Should you buy or sell an apartment building in Southwestern Ontario right now
The case for buying
- Yields have widened. Where a cap rate was disclosed the median was 6.00%, against the 4% to 5% that prevailed for prime Ontario multifamily in the low-rate era. That is a real repricing.
- Rates have stopped moving. The Bank of Canada held at 2.25% on 15 July 2026 and is widely read as having finished its easing cycle. Uncertainty about direction was what kept buyers and sellers apart for two years.
- The 7 to 12 unit band is genuinely cheap at $145,000 per unit, and it rose 13.1% year over year on a decent sample.
- Supply of willing sellers is unusually deep because of the twenty-year cohort.
The case for selling
- Volume and pricing are both up and cap rates have stabilised rather than continuing to widen.
- Fundamentals are softening underneath the pricing. Vacancy is rising, turnover rent growth has slowed, and the immigration taps that filled entry-level units are being turned down through 2028. None of that has flowed into values yet. It is the mechanism by which it eventually would.
- If you own post-2018 stock the decontrol premium is being paid right now.
- Small buildings are having a good year. The 1 to 6 unit band posted the highest per-unit pricing in the dataset.
How to value your apartment building
- Stabilise the net operating income. Actual collected rents, actual vacancy, a real management allowance whether or not you pay one, and a real capital reserve.
- Apply a market capitalisation rate. In this region that starts around 6% for Class C stock and tightens for newer, larger, better-located assets.
- Sanity-check against per-unit comps for your building size and your town, using the tables above rather than a regional average.
- Deduct deferred capital honestly. Roof, windows, electrical service and envelope on a 1960s building are not optional and a buyer will price them whether you do or not.
- Adjust for rent control status. Post-2018 stock is a different asset and should not be valued off pre-1980 comps.
City and county notes
London
36 single-asset sales, the deepest market in the region, at a median of $175,915 per unit and $213.91 per square foot. It also now carries the weakest labour market in Ontario at 8.2% and a fifteen-year vacancy high of 4.0%. London has its own renoviction bylaw, approved 24 September 2024, requiring a landlord who serves an N13 to apply for a Rental Unit Repair Licence within seven calendar days, with a building permit and a professional report, at $600 per unit. Residential rental licensing under bylaw CP-19 also applies to buildings of four or fewer units. Anyone underwriting a London acquisition on a vacate-and-renovate plan must price both regimes in.
Windsor
23 sales at a median of $151,852 per unit. The widest spread in the region: from $57,692 per unit at 1825 Division Road to $465,086 at the McHugh Street new build. Employment is genuinely improving on the Stellantis third shift and the NextStar battery plant, but the population base is shrinking. Windsor also introduced rental licensing under bylaw 14-2023, upheld by the Ontario Court of Appeal on 3 February 2025. The pilot concluded in February 2025 and I have not been able to confirm the current status, so verify it with the City directly.
Sarnia and Lambton
16 county sales at $141,477 per unit, the value end of the three major markets, with vacancy at 4.9% on CMHC's all-structure measure. Sarnia carries the region's most direct exposure to the 19 August tariff list through Chemical Valley. Set against that, Ontario and Alberta announced a 3,300 kilometre pipeline to Sarnia-Lambton on 6 July 2026 with a refinery expansion vision attached. No investment figure or job count has been published and it is at feasibility stage, so treat it as an intention rather than a project.
St Thomas and Elgin
Nine county sales at $187,121 per unit, above both Windsor and Sarnia. St Thomas is the site of the Volkswagen battery plant, and local forecasting has the London area rebounding from 2027 as it ramps. It is one of the few genuinely forward-looking positives in the region.
Stratford and Perth
Six county sales at $204,167 per unit, the strongest county in the region, though heavily influenced by 30 Queensland Road, a 150-unit 2025 build that traded at $65.8 million. Stratford also holds the highest per-unit sale in the dataset, a three-unit building on Church Street at $893,033 per unit.
Chatham-Kent
Three sales at a median of $105,000 per unit, the lowest in the region. Vacancy 4.4%. The local steel sector has been under real pressure, with the Canadian Institute of Steel Construction citing roughly 5,000 job losses industry-wide.
Woodstock, Tillsonburg and Oxford
Two county sales at $200,556 per unit. Woodstock has the tightest vacancy of any centre in this report at 2.8%, well below the national 3.1%, which makes it worth watching for anyone priced out of London.
Frequently asked questions
What is a good cap rate for an apartment building in Ontario?
It depends on the class and the market. Across Southwestern Ontario sales where a capitalisation rate was disclosed, the median was 6.00% and the middle half fell between 5.06% and 6.58%. CBRE puts London low-rise Class B at 5.00% to 6.00% and new construction at 4.50% to 5.25% for the second quarter of 2026. Older Class C stock in smaller centres trades wider than both.
How much is my apartment building worth in Southwestern Ontario?
Start with stabilised net operating income, apply a market cap rate of roughly 6% for Class C stock, then sanity-check the result against per-unit comparables for your building size and town. Median pricing runs $194,167 per unit for buildings of 1 to 6 units, $145,000 for 7 to 12, $156,039 for 13 to 24 and $159,382 for 25 and up. Deduct deferred capital honestly.
Which apartment buildings are exempt from rent control in Ontario?
Units first occupied for residential purposes after 15 November 2018 are exempt from the annual rent increase guideline. Units first occupied on or before that date remain subject to it. In this transaction record, exempt buildings traded at roughly $298 per square foot against $191 for controlled stock.
What is the Ontario rent increase guideline for 2027?
The 2027 guideline is 1.9%, down from 2.1% in 2026. An N1 notice requires 90 days, so a landlord raising rent on 1 January 2027 needs to serve by early October 2026.
What changed at the Landlord and Tenant Board on 1 July 2026?
Five things: the review request window fell from 30 days to 15, above-guideline increase orders must be served within 7 days with the certificate of service due within 5, maximum fines under section 236 doubled to $100,000 for an individual and $500,000 for a corporation, a mandatory payment agreement form was introduced under section 206, and new rules govern air conditioner installation and seasonal charges. A further tranche is scheduled for September 2026.
Is now a good time to buy an apartment building in London or Windsor?
Yields have widened to around 6% and the Bank of Canada has stopped cutting, which supports buying. Against that, London has the weakest labour market in Ontario at 8.2% and vacancy at a fifteen-year high of 4.0%, and Windsor's population is shrinking even as its unemployment rate improves. The buildings that work are the ones where a documented rent gap can be closed within a reasonable hold, not the ones priced on the assumption that rents reset sharply at turnover.
What is the vacancy rate in London Ontario?
CMHC recorded 4.0% purpose-built apartment vacancy in the London area in its October 2025 survey, the highest in fifteen years, up from 2.9% a year earlier. Average two-bedroom rent was $1,651, up 4.1% on a same-sample basis.
Do I need a licence to rent out an apartment building in London Ontario?
London's residential rental licensing bylaw CP-19 applies to buildings of four or fewer rental units, five-plus unit buildings classified as converted dwellings, and non-owner-occupied properties. Units in apartment buildings and standard townhouses are exempt. Separately, London's renoviction bylaw requires a Rental Unit Repair Licence at $600 per unit within seven days of serving an N13.
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