Canadian Commercial Real Estate Sees Stabilization, Growth Expected in 2026
Event summary
- Morguard Corporation released its 2026 Canadian Economic Outlook and Market Fundamentals Report on January 15, 2026.
- The report forecasts a gradual stabilization of Canada's multi-suite residential rental market and improved outlook for the office sector.
- Morguard's portfolio, as of September 30, 2025, was valued at $19.0 billion.
- Trade tensions with the U.S. and tariffs impacted Canada's economy in early 2025, slowing growth.
The big picture
Morguard's report suggests a cautious optimism for Canadian commercial real estate, acknowledging the near-term headwinds of trade tensions but highlighting the potential for stabilization and growth as economic conditions improve and financing becomes more accessible. The resilience of high-quality assets, even during periods of slower growth, underscores the continued appeal of Canadian real estate to private capital. The report's focus on regional variations, covering markets from Halifax to Victoria, indicates a nuanced view of the Canadian landscape.
What we're watching
- Demand Dynamics
- Whether the projected increase in youth employment will be sufficient to offset the impact of new supply on multi-suite residential rental demand remains to be seen, potentially influencing landlord incentives and rent stabilization.
- Tariff Impact
- The extent to which easing trade tensions with the U.S. will translate into sustained economic growth and renewed business confidence warrants close observation, as it directly impacts commercial real estate investment.
- Lending Conditions
- The pace at which improved lending conditions will spur increased investor re-engagement and narrow bid-ask spreads will be a key determinant of transaction volume and asset pricing across Canadian commercial property sectors.
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