Strong demographics, tight supply and renewed institutional demand position Canada for a busier 2026
Canada is one of the most appealing real estate markets heading into 2026, offering investors stability, strong demographic drivers and a supply environment that remains far tighter than most global peers.
Although the broader economy has shown signs of strain and uncertainty around trade policy continues, the underlying fundamentals of the country’s property sectors remain supportive of renewed capital deployment, according to Colliers’ 2026 Global Investor Outlook released today (Nov. 19).
After a subdued 2025, several indicators point toward a more active year ahead, such as narrowing bid-ask spreads, book values adjusting to market reality, and lenders gradually becoming more confident. As financing conditions improve and interest rates normalize, both domestic and international investors are preparing to re-enter the market in a more meaningful way.
“Lenders are still very much open for business for the right product, and fundraising on the equity side is improving but we’re still below prior peaks,” says Reid Taylor, VP, Capital Markets, Colliers Canada. “Following a lull in transaction activity in 2025, a lot of dry powder has been sidelined but pressure to deploy remains, which bodes well for investment activity to improve next year.”
Even with tighter immigration controls, Canada continues to experience population growth well above most advanced economies.
Persistent housing undersupply, especially in major metropolitan areas, keeps multifamily demand elevated, while high construction costs, long approval timelines and restrictive planning processes prevent rapid expansion of new supply, making existing assets more defensible.
“It’s not easy to develop here, which means we’re much less overbuilt in basically every asset class,” notes Adam Jacobs, Head of Research, Colliers Canada. “The limited development outlook supports the argument for investing in Canada, because in many areas there’s a fairly clean slate without competition.”
Institutional capital is showing signs of reactivation, particularly among Canadian pension funds and major landlords that had stepped back in recent years. Many are shifting from development heavy strategies toward stabilized income-producing assets and platform-level partnerships.
At the same time, public-to-private opportunities are expanding, with several REITs trading below NAV and strategic buyers increasingly exploring privatizations, recapitalizations and joint ventures. Preferred equity and mezzanine capital are also gaining prominence as investors structure deals to manage risk and return in a shifting rate environment.
Retail, especially grocery-anchored and necessity-based centres, remains a core institutional focus due to consistent income profiles and scarce new construction. Secondary markets are drawing more interest as major cities become increasingly supply constrained. Industrial and logistics assets continue to perform well despite moderating demand, with urban infill and small- to mid-bay facilities emerging as priority targets.
Multifamily experienced a more than 20% increase in investment volume in 2025 and is positioned for another active year as rental demand stays strong across cities such as Toronto, Calgary and Ottawa.
Overall, these conditions make Canada one of the most strategically advantageous markets for investors in 2026.
