Net operating income divided by purchase price gives the rate, so it moves with rent, vacancy, property tax and insurance as much as with the purchase price itself. Two houses at a similar $444,700-level price can post very different rates once one needs a new roof and the other does not.
Financing shapes the target more than most buyers expect, since a non-owner-occupied purchase generally needs a 20 percent down payment because CMHC insured financing is not available on it, changing the return math before a tenant ever moves in.
With 1.63 months of supply in the city, a disciplined buyer still has room to negotiate on price, which moves a cap rate more than almost any other single lever. Get your hand-reviewed valuation from Joel Dyck.