Multi-Residential Market: 2019-2021

By taking a deeper dive into the financials of multi-residential properties (2-6 units) that have sold on the Halifax Peninsula in 2019, 2020 and the first two quarters of 2021, we have made some discoveries that may add value to investors.

When collecting data for the purpose of comparison, we assumed the properties were purchased by an investor who outsourced property management.

Figure 1: Halifax Peninsula 2019-2021 Sold Price

Figure 1 indicates that 4-6 unit properties (from Q1 2019 to the end of Q2 2021) had the highest average sold price increase at 64% out of the three different property types. During the same time period the average increase for 2-unit properties was 27%, and the average increase for three-unit properties was 20%.

Figure 2: Halifax Peninsula 2019-2021 Cap Rates

Capitalization rates (or Cap rates) are an important metric when evaluating all investment opportunities – both small and large. Cap rates can help an investor determine if an opportunity will provide the desired rate of return. They are also useful in comparing one property investment opportunity to another. Cap rates however, do not take financing into consideration.

To learn more about cap rates we suggest you check out our blog:

Figure 3: Halifax Peninsula 2019-2021 Cap Rates

Figure 3 indicates that 2-unit multi-residential cap rates have compressed the most since 2019 – decreasing from 4.3% to 3.4%. The average sold price of a 2-unit property has increased since 2019, however these increases in price were not followed by a proportional increase in average Net Operating Income (NOI), therefore lowering the cap rate.

Generally speaking, the riskier investment, the higher the cap rate will be. This is because investors seek proportional compensation for accepting risk. When cap rates increase, property values decrease. Conversely, when cap rates decrease, property values increase.


In conclusion, 2-unit properties were tied with 4-6 unit properties for the highest returning investments in 2019. By 2021, 2-unit properties were the lowest returning investments. 4-6 unit properties saw their cap rates compressed marginally, with the return remaining similar to 2019 levels. 3-unit properties were the lowest returning investments in 2019, however by 2021 they offered the second greatest return after 4-6 unit properties.

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Assumptions Used

  • Management Fee: 5% of approximate total income.
  • Maintenance: $1,000 a year per unit.
  • Taxes: For the properties whose tax bill was unknown, averages are used for 2 unit, 3 unit, and 4+ unit properties.
  • Insurance: For properties whose insurance bill was unknown, averages are used for 2 unit, 3 unit, and 4+ unit properties.
  • Heat & Electricity: For properties that did not show their heat and/or electricity bills, those expenses are the responsibility of the tenant.
  • Water: For properties whose water bill was unknown, averages are used for 2 unit, 3 unit, and 4+ unit properties.
  • Snow/Garbage: $1000 a year.
  • Commercial Units: Any properties that include commercial units are excluded from the data.
  • Properties without Rental Income: Any properties that did not include rental income on the NSAR database Paragon are excluded from the data.
  • Financing & Income Tax: Excluded from the data since these expenses are specific to the individual and not the property.

*All of the property data used in this report is from the NSAR database Paragon.