Should investors keep focusing on Canada\u2019s largest cities, or look more closely at smaller growth markets? The answer depends on price, rental demand, supply, approvals, financing, and how much risk an investor can accept.<\/p>\n\n\n\n
The debate around secondary markets vs big cities real estate is not about one being good and the other being bad. Big cities often have deeper buyer pools, larger economies, and more rental demand. Secondary markets can offer lower entry costs, stronger yield potential, and less competition. The better choice is usually the market where the numbers, planning path, and local demand make sense.<\/p>\n\n\n\n
Secondary real estate markets are cities that are smaller than major hubs like Toronto, Vancouver, or Montreal, but still have real economic activity, population growth, rental demand, and infrastructure.<\/p>\n\n\n\n
In Canada, examples may include places such as Barrie, Kitchener-Waterloo, London, Hamilton, Halifax, Kelowna, and parts of the Greater Golden Horseshoe outside Toronto. These are not small towns. Many are growing urban centres with transit links, universities, hospitals, employers, and rising housing needs.<\/p>\n\n\n\n
Statistics Canada<\/a> reported that Canada\u2019s 41 census metropolitan areas reached 31.17 million people as of July 1, 2025. Growth slowed to 1.0 percent from July 2024 to July 2025, after much faster growth the year before. That means investors need to look market by market, not assume every city is growing at the same pace.<\/p>\n\n\n\n Major cities continue to attract investors because demand comes from many sources at once. Toronto, Vancouver, and Montreal have large job centres, universities, immigration demand, transit systems, and deep rental pools. Together, these factors can support long-term demand for rental housing.<\/p>\n\n\n\n For investors, big cities may also be easier to understand and compare. There are usually more recent sales, more active lenders, and more buyers who already know the market. This can make it easier to assess value, arrange financing, or plan a future sale.<\/p>\n\n\n\n The main challenge is cost. Land, construction, taxes, and approvals can be expensive, and timelines can be slow. A strong location in a major city can still be difficult to underwrite if the entry price is too high. In many cases, investors accept lower returns because they believe the market has stronger long-term demand.<\/p>\n\n\n\n Secondary real estate markets Canada investors are watching often have one simple appeal. The entry price may be lower than in large cities, while rental demand can still be strong.<\/p>\n\n\n\n This matters because real estate investment is not only about rent. It is about the relationship between cost and income. If a property costs too much to buy or build, even strong rent may not produce a good return.<\/p>\n\n\n\n A market such as Barrie, for example, can benefit from its location near the Greater Toronto Area, GO Transit access, and demand from people looking for more attainable housing outside Toronto. Similar patterns can appear in other secondary cities where population growth, employment, and infrastructure are moving together.<\/p>\n\n\n\n CMHC\u2019s 2025 Rental Market Report<\/a> shows that Canada\u2019s purpose-built rental vacancy rate rose to 3.1 percent in 2025, compared with 2.2 percent in 2024. This means investors should look past the national average and study the city they are actually considering. A market with new rental supply, slower rent growth, or weaker job growth will carry different risk than a market where renter demand remains strong and well-located rental housing is still limited.\u00a0<\/p>\n\n\n\n This is why the details of each site matter. In Barrie, for example, Black Creek Group<\/a> has focused on downtown rental projects where transit access, planning progress, and local housing needs can be studied together. The point is not that every secondary market is attractive. The point is that the right site in the right market can sometimes offer a stronger balance between cost, demand, and risk than a more expensive site in a major city.<\/p>\n\n\n\n The big city vs small city property investment decision often comes down to the type of risk an investor is willing to take.<\/p>\n\n\n\n In a big city, the risk is often price and competition. Investors may pay more for land or existing buildings. Approvals may take longer. Construction may be more complex. Rent may be high, but the total cost can still reduce returns.<\/p>\n\n\n\n In a secondary market, the risk is often market depth. There may be fewer large employers, fewer institutional buyers, and fewer comparable projects. If demand changes, the market may have less room to absorb a weak project.<\/p>\n\n\n\n That does not make secondary markets unsafe. It means investors need to be more careful with due diligence. They should study local jobs, population trends, rental supply, municipal planning, transit, schools, and future competition.<\/p>\n\n\n\n A secondary market should not be judged only by lower land cost. A lower price can help, but it does not replace rental demand, planning certainty, or a clear exit plan. A good investment still needs strong local support from the numbers.<\/p>\n\n\n\n Rental yield is the income from a property compared with its cost or value. In simple terms, it helps answer a basic question. How much income does the asset produce for the money invested?<\/p>\n\n\n\n Rental yields secondary vs major markets can look more favourable in smaller cities because purchase prices and land costs may be lower. A rental building in a secondary market may produce a better income return than a similar asset in a major city.<\/p>\n\n\n\n A higher rental yield is not always better. In some cases, it may come with higher vacancy risk, slower rent growth, or fewer buyers when it is time to sell. A lower rental yield in a major city may still make sense if the property has strong long-term demand and a wider buyer pool.<\/p>\n\n\n\n This is why Black Creek Group reviews<\/a> rental yield as part of a wider project<\/a> picture. Land cost, construction cost, financing, approvals, vacancy, and exit timing all need to be considered together. A project may look attractive at first, but it still needs to make sense after the main costs, risks, and timing are reviewed.<\/p>\n\n\n\n There is no single list of the best cities for real estate investment Canada that works for every investor. The best city depends on the strategy.<\/p>\n\n\n\n An investor looking for long-term rental income may focus on vacancy, rent levels, employment, and future supply. A developer may care more about land cost, zoning, site plan approval, construction costs, and municipal alignment. A family office may place more weight on capital protection, timing, and exit options.<\/p>\n\n\n\n Strong markets often share a few traits. They have population growth, realistic housing needs, stable employment, improving transit, and a local government that understands the need for new housing. They also have enough demand to support the project when it is finished, not only when it starts.<\/p>\n\n\n\n Barrie is one example of a market that some rental housing developers are studying more closely. Black Creek Group\u2019s Projects<\/a> Sophia<\/a> and Vespra<\/a> reflect that approach, where the investment case is tied to downtown infill, rental housing needs, planning progress, and access to transit.<\/p>\n\n\n\n The lesson is not that every secondary city is a good investment. The lesson is that the right site in the right secondary market can sometimes offer a clearer path than an expensive site in a major city.<\/p>\n\n\n\n Secondary markets can offer strong opportunities, but they are not a shortcut. Investors still need careful underwriting, local knowledge, and a clear plan.<\/p>\n\n\n\n Market conditions, interest rates, construction costs, approvals, rental demand, financing terms, and timing can change. Past performance does not predict future results. Any real estate investment should be reviewed with qualified legal, tax, financial, and real estate advisors.<\/p>\n\n\n\n The best decision is not always the biggest city or the highest yield. It is the market where the project, price, timing, demand, and risk all make sense together.<\/p>\n\n\n\n Secondary real estate markets are smaller cities or urban areas outside the largest national hubs. In Canada, they may include growing centres near major regions, university towns, transit-linked cities, or communities with rising rental demand. They are often large enough to support investment, but may have less competition than Toronto or Vancouver.<\/p>\n\n\n\n Secondary markets can be better for some investors, but not all. They may offer lower entry costs and better rental yields. Big cities may offer deeper demand, more buyers, and more lender interest. The better option depends on the asset, location, price, financing, and local supply.<\/p>\n\n\n\n Some investors are moving to secondary markets because major cities have become expensive and harder to underwrite. Secondary markets may offer more reasonable land costs, growing rental demand, and less competition. Investors are also watching cities with transit access, population growth, and municipal support for new housing.<\/p>\n\n\n\n The main risks include smaller tenant pools, fewer buyers at exit, local job weakness, slower rent growth, and new supply arriving at the same time. Approvals and infrastructure can also affect timelines. Investors should study each city carefully before assuming that lower prices mean lower risk.<\/p>\n\n\n\n Secondary markets often show stronger rental yields because purchase prices and land costs may be lower. Major cities may have lower yields because assets are more expensive. A higher yield is not always better. Investors should also consider vacancy, rent growth, financing, exit value, and long-term demand.<\/p>\n\n\n\n A strong real estate decision is not based on city size alone. Investors need to compare price, rental demand, approval status, construction costs, financing, and exit options before choosing a market.<\/p>\n\n\n\n Large cities can offer deeper demand and more active buyer interest. Secondary markets can offer lower entry costs and better rental yield potential when local housing needs are clear.<\/p>\n\n\n\n Black Creek Group\u2019s focus on markets such as Barrie is one example of reviewing opportunities at the project level, not just by market reputation. When the site is well located, the price leaves room for costs, and demand supports the finished building, a secondary market can stand as a strong investment choice.<\/p>\n","protected":false},"excerpt":{"rendered":" Should investors keep focusing on Canada\u2019s largest cities, or look more closely at smaller growth markets? The answer depends on price, rental demand, supply, approvals, financing, and how much risk an investor can accept. The debate around secondary markets vs big cities real estate is not about one being good and the other being bad. […]<\/p>\n","protected":false},"author":1,"featured_media":178,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-177","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/blackcreekgroup.ca\/blog\/wp-json\/wp\/v2\/posts\/177","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blackcreekgroup.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blackcreekgroup.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blackcreekgroup.ca\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blackcreekgroup.ca\/blog\/wp-json\/wp\/v2\/comments?post=177"}],"version-history":[{"count":2,"href":"https:\/\/blackcreekgroup.ca\/blog\/wp-json\/wp\/v2\/posts\/177\/revisions"}],"predecessor-version":[{"id":182,"href":"https:\/\/blackcreekgroup.ca\/blog\/wp-json\/wp\/v2\/posts\/177\/revisions\/182"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blackcreekgroup.ca\/blog\/wp-json\/wp\/v2\/media\/178"}],"wp:attachment":[{"href":"https:\/\/blackcreekgroup.ca\/blog\/wp-json\/wp\/v2\/media?parent=177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blackcreekgroup.ca\/blog\/wp-json\/wp\/v2\/categories?post=177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blackcreekgroup.ca\/blog\/wp-json\/wp\/v2\/tags?post=177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Why Big Cities Still Attract Capital<\/strong><\/h2>\n\n\n\n
Why Investors Are Looking at Secondary Markets<\/strong><\/h2>\n\n\n\n
Big City vs Small City Property Investment<\/strong><\/h2>\n\n\n\n
Rental Yields Secondary vs Major Markets<\/strong><\/h2>\n\n\n\n
Best Cities for Real Estate Investment Canada<\/strong><\/h2>\n\n\n\n
What Readers Should Keep in Mind<\/strong><\/h2>\n\n\n\n
FAQs<\/strong><\/h2>\n\n\n\n
What are secondary real estate markets?<\/strong><\/h3>\n\n\n\n
Are secondary markets better for real estate investment than big cities?<\/strong><\/h3>\n\n\n\n
Why are investors moving to secondary markets?<\/strong><\/h3>\n\n\n\n
What are the risks of investing in secondary markets?<\/strong><\/h3>\n\n\n\n
How do rental yields compare between secondary and major cities?<\/strong><\/h3>\n\n\n\n
Conclusion<\/strong><\/h3>\n\n\n\n