Canadian
Real Estate:
Optimism
To Build
27th Annual Edition
2025 Canadian Economic Outlook
and Market Fundamentals Report
Multi-Suite Residential
Rent growth moderated in 2024 as rental demand softened. With new multi-suite residential rental property completions reaching to a multi-decade high, rents remained at record high levels for all unit sizes.
Investor sentiment toward multi-suite residential rental property acquisitions remained strong, which was consistent with the trend of the past few years.
Looking ahead to 2025, demand for multi-suite residential rental investments is expected to outpace supply as investors seek acquisition opportunities in a sector with attractive, prevailing yields and a positive, long-term outlook.
Retail
Market
Demand for retail space in the country’s most productive shopping centres and community strip centres outpaced supply as national and international retailers continued to expand their brick-and-mortar presences. A range of new retail offerings, concepts, and formats have been introduced across the country.
Looking ahead to 2025, investment market activity in the retail sector is expected to increase while the retail leasing market stabilizes, supported by a balanced demand-supply dynamic.
Office
Market
Leasing activity in premium-quality towers has been relatively brisk as businesses sought to capitalize on market conditions
Consequently, modest upward rent pressure was observed for space in the nation’s premium-quality towers.
In 2025, office property investment sales are expected to increase gradually as investor confidence level rises and lending market conditions improve.
Industrial Market
High-quality warehouse and logistics properties with stable tenants on long-term leases remained a preferred investor acquisition target.
In 2025, industrial investment property sales are expected to remain at a relatively brisk pace with investors exhibiting confidence in the market’s fundamental outlook.
Property values in industrial sector are projected to rise in 2025, positively impacting investment performance.
Economic Factors
Canadian economic growth is expected to remain moderate in 2025 supported by the continuation of the interest rate-cutting cycle, increased consumer and government spending, and a healthier business investment trend.
Economic activity is anticipated to rise modestly as domestic demand gradually strengthens.
Housing market activity will strengthen in 2025 driven largely by lower mortgage rates and household income growth.