While you're never guaranteed to turn a profit on the Toronto real estate market, some investments are more sound than others at any given time — and right now, three specific neighbourhoods are seeing condo values rise at a disproportionate rate.

Strata, a condo-specific real estate and analysis firm in Toronto, just published a new report highlighting the remarkable investment returns currently being observed in the city's Malvern, Rexdale and Jane and Finch neighbourhoods.

"Condos in Toronto's traditionally-overlooked neighbourhoods have the highest appreciation rates in the city," reads the report, noting that the three aforementioned areas are now outpacing the downtown core by as much 20 per cent.

"Not only are investors maximizing their ROI in these neighbourhoods, but the majority of Toronto's best-performing condominiums are also concentrated here."

According to Strata, the city's average appreciation rate for condos is about 2 per cent, year over year.

Scarborough's Malvern neighbourhood alone saw the average cost-per-square-foot for condos increase by a whopping 14 per cent over the past 12 months, while Jane and Finch posted an appreciation rate of roughly 11 per cent over the same period of time.

Rexdale, located in North Etobicoke, saw the same values rise by 5.15 per cent over the past two months alone, according to Strata.

While true that this has not been a typical year for real estate — not by a long shot — we've actually been observing the opposite effect in terms of price appreciation on condos in downtown Toronto.

Strata calculates that condos in the downtown core have actually seen an overall price depreciation per-square-foot of -6 per cent.

"Because prices downtown are typically higher, people usually look to outlying neighbourhoods for better value. This creates more demand than there is supply, resulting in value increases as buyers compete and outbid one another," says Strata's Robert Van Rhijn.

"Our data shows that sellers in Jane and Finch, Rexdale and Malvern have been the beneficiaries of this trend over the past year."

Van Rhijn says that the majority of Toronto's highest-performing condominiums are currently concentrated these three areas, providing examples of properties and the year-over-year boost owners saw in their investments between February of 2020 and 2021.

For instance: Values for condos in the building at 480 McLevin Avenue in Malvern rose 22 per cent, year over year. Rexdale's 6 Humberline Drive condo complex saw average values spike by 23 per cent.

Around Jane and Finch, condos in the buildings at 10 Eddystone Avenue and 10 Tobermory Drive appreciated by roughly 25 and 24 per cent, respectively, over the past 12 months. 

"As prices rise, we'll undoubtedly see the typical signs of gentrification occur," says Van Rhijn of the three neighbourhoods highlighted by Strata.

"That means more boutique shops, restaurants and other amenities popping up in these areas. This will result in even more demand among a more diverse demographic of buyers. Both families and investors would be smart to start exploring these neighbourhoods, given they may look quite different 10 years down the road."