CAP rates in Vancouver are around 4%, or lower even. A building that just sold in Kitsilano, for example, sold for 28 times annual rent .. twice what you'd pay in Edmonton .. say 12-14 ..
CAP rates in Calgary are around 5%, and in Edmonton 5.5% to sub 6%, similar to Burnaby, New Westminster or N-Vancouver.
Many good condition assets or in good locations are not for sale or below that CAP rate, in the 130-150/door in Edmonton and 165 to 200/door range in Calgary. An asset we bought in Dec. 2010 went from $14.65M to close to $20M not even 2 years later.
Sub 100/door in any major city in AB is usually garbage unless you get lucky. We're buying an asset in a B area in B condition for high 90's/door next month. Little decent inventory around but still far better cash-on-cash return with lower risk than stock market, and higher than bonds.
An asset we bought for 30's/door in Fox Creek, AB in 2005 and sold for 70's/door in 2007 with a triple digit cash-on-cash ROI is now listed in the 80's/door .. in a town of not even 2500 people halfway between Edmonton and Grand Prairie.
Everyone (like pension funds, REITs, high net worth individuals, retirees, ..) is scrambling for decent, sustainable, long term yields with low risk, and apartment buildings in good locations, impeccably managed provide that !
I expect CAP rates to drop further, Calgary to around 4% and Edmonton to 5%, as interest rates will stay low for a while. Long term CMHC insured money is at 2.4% and without CMHC at around 3%. So, it makes sense to borrow and buy an asset with a yield that is 50-70% higher (i.e. 4 to 6%).
I am not too familiar with GTA, Ottawa, Winnipeg or Halifax, but would expect quality assets there to be between 5 and 6% CAP rates also, about a percent higher in dubious locations.
With the tightening of mortgages for single family units more people chose to rent, or longer; thus lowering vacancies and driving up rents and rental properties values - an unintended, but expected consequence. Thank you, Jim Flaherty !