Canadian real estate sees renewed optimism, though opportunities vary sharply by asset class and region
- Senior housing, retail and industrial emerge as the top real estate bets for 2027, with each requiring a distinct investment and operating approach
- Calgary, Toronto and Edmonton lead the Canadian markets to watch, although performance varies significantly by property type
Calgary, Toronto and Edmonton lead the Canadian markets to watch, although performance varies significantly by property type
- Commercial real estate investment reached $16.2 billion in the second quarter of 2026, the highest level since early 2022, as deal activity begins to recover
Commercial real estate investment reached $16.2 billion in the second quarter of 2026, the highest level since early 2022, as deal activity begins to recover
Toronto, October 27, 2026 — Confidence is returning to Canada’s real estate market heading into 2027, but the recovery is unfolding unevenly across asset classes, regions and sources of capital, according to the Emerging Trends in Real Estate 2027 report from PwC Canada and the Urban Land Institute (ULI).
Canadian investors’ buying sentiment is at its strongest in 15 years, and deal activity is beginning to recover: commercial real estate investment reached $16.2 billion in the second quarter of 2026, its highest level since early 2022, according to CBRE. Senior housing, retail and industrial are emerging as the leading opportunities, while data centres, care, and rising defence investment are opening new areas of growth at the intersection of real estate and infrastructure. Success will depend on how organizations respond to capital, operating and market constraints.
“Optimism is returning to Canadian real estate, but it must be earned. We are seeing clearer signs that the market is turning a corner, with opportunities emerging across asset classes and regions. The organizations best positioned for the next cycle will be those that remain selective, move with conviction and address the constraints standing between improving conditions and real opportunity.”
“Optimism is returning to Canadian real estate, but it must be earned. We are seeing clearer signs that the market is turning a corner, with opportunities emerging across asset classes and regions. The organizations best positioned for the next cycle will be those that remain selective, move with conviction and address the constraints standing between improving conditions and real opportunity.”
Senior housing, retail and industrial lead opportunities for 2027
- Senior housing is seeing growing demand as Canada’s population ages. The oldest baby boomers turned 80 in 2026, and Cushman & Wakefield estimates Canada will need nearly 200,000 additional senior housing rental units over the next decade. The opportunity also comes with complexity: senior housing requires expertise in staffing, service delivery, regulation and day-to-day operations.
Senior housing is seeing growing demand as Canada’s population ages. The oldest baby boomers turned 80 in 2026, and Cushman & Wakefield estimates Canada will need nearly 200,000 additional senior housing rental units over the next decade. The opportunity also comes with complexity: senior housing requires expertise in staffing, service delivery, regulation and day-to-day operations.
- Retail is showing signs of a supercycle after years of concern that e-commerce would weaken physical stores. Limited new supply and renewed tenant demand have broadened interest beyond necessity-based and grocery-anchored properties.
Retail is showing signs of a supercycle after years of concern that e-commerce would weaken physical stores. Limited new supply and renewed tenant demand have broadened interest beyond necessity-based and grocery-anchored properties.
- Industrial remains a longstanding best bet, but the opportunity has become more targeted. Small- and mid-bay properties are attracting particular interest, while large-bay properties can carry greater risk when they depend on a single major tenant.
Industrial remains a longstanding best bet, but the opportunity has become more targeted. Small- and mid-bay properties are attracting particular interest, while large-bay properties can carry greater risk when they depend on a single major tenant.
Recovery looks different across Canada
Canada is not experiencing one real estate cycle, but several. Calgary, Toronto and Edmonton lead the Canadian markets to watch for 2027, while conditions within cities vary considerably by property type.
The Greater Toronto Area is one of the clearest examples. Toronto’s condominium market continues to face significant headwinds, with pre-construction sales falling 80% year over year in the second quarter of 2026 and completed developer-held inventory reaching a record 5,001 units, according to Urbanation. At the same time, higher-quality downtown office and industrial properties are showing strength. CBRE reported downtown Class AAA office vacancy was 2.6% in the second quarter, while Colliers reported Toronto’s industrial vacancy rate of 2.2% was the lowest in Canada.
“The GTA’s real estate market is moving at different speeds. Industrial and premium office show signs of recovery, while condominiums remain challenged. Purpose-built rental is supporting construction despite difficult project economics. Long-term investment opportunities remain, but realizing them requires patient capital and sustained housing delivery to prevent today’s slowdown from creating future supply gaps and renewed pressure on housing affordability.”
“The GTA’s real estate market is moving at different speeds. Industrial and premium office show signs of recovery, while condominiums remain challenged. Purpose-built rental is supporting construction despite difficult project economics. Long-term investment opportunities remain, but realizing them requires patient capital and sustained housing delivery to prevent today’s slowdown from creating future supply gaps and renewed pressure on housing affordability.”
Regional highlights include:
- Calgary ranks first among the markets to watch, with real GDP growth forecast at 3.4% in 2027, according to Signal49. Interviewees also point to renewed interest in the city and an economy that is more diversified than in previous cycles.
Calgary ranks first among the markets to watch, with real GDP growth forecast at 3.4% in 2027, according to Signal49. Interviewees also point to renewed interest in the city and an economy that is more diversified than in previous cycles.
- Edmonton is forecast to see real GDP growth accelerate to 3.0% in 2027, according to Signal49, while its industrial market remains one of the city’s strongest real estate stories, particularly in small- and mid-bay space.
Edmonton is forecast to see real GDP growth accelerate to 3.0% in 2027, according to Signal49, while its industrial market remains one of the city’s strongest real estate stories, particularly in small- and mid-bay space.
- Ottawa faces pressure from federal spending cuts and a shrinking government office footprint, but its residential and industrial markets remain comparatively resilient. Industrial vacancy held at 2.5% in the second quarter of 2026, according to Colliers.
Ottawa faces pressure from federal spending cuts and a shrinking government office footprint, but its residential and industrial markets remain comparatively resilient. Industrial vacancy held at 2.5% in the second quarter of 2026, according to Colliers.
- Halifax recorded the highest year-over-year in-place rent growth in Canada at 5.7% in the second quarter of 2026, according to Yardi, even as economic and population growth moderate.
Halifax recorded the highest year-over-year in-place rent growth in Canada at 5.7% in the second quarter of 2026, according to Yardi, even as economic and population growth moderate.
- Montreal is seeing private funds buy unsold condominium units at discounts and operate them as rentals as the residential market adjusts to new supply.
Montreal is seeing private funds buy unsold condominium units at discounts and operate them as rentals as the residential market adjusts to new supply.
- Vancouver remains challenging for new development, but its downtown office market is showing relative strength, with a vacancy rate of 12.2% in the second quarter of 2026, according to CBRE.
Vancouver remains challenging for new development, but its downtown office market is showing relative strength, with a vacancy rate of 12.2% in the second quarter of 2026, according to CBRE.
- Quebec City had approximately 1.3 million square feet of industrial space under construction in the second quarter of 2026, with data centres accounting for most of that activity, according to Colliers.
Quebec City had approximately 1.3 million square feet of industrial space under construction in the second quarter of 2026, with data centres accounting for most of that activity, according to Colliers.
An Oxford Economics forecast prepared for PwC projects Canada will need US$4.7 trillion in infrastructure investment by 2050. Data centres are a key part of that buildout, which is projected to peak in 2029, making access to power an increasingly important factor in where development can happen.
Improving capital availability supports a selective recovery
Capital conditions are improving, but funding is not flowing evenly. Debt remains plentiful, while lenders favour strong sponsors, income-producing assets and highly bankable projects.
Ahead of a 2027 refinancing wave, equity, rather than debt, has emerged as a defining constraint for borrowers looking to recapitalize and move forward. Structured capital, including preferred equity and mezzanine debt, is increasingly filling the gap between senior debt and common equity. The result is a recovery that will reward selectivity and execution, rather than broad optimism.
Access to capital alone will not determine which organizations benefit from the recovery; AI, identified by survey respondents as the industry’s top disruptor, is also changing how companies operate assets.
To learn more and access the full report, visit PwC Canada’s Emerging Trends in Real Estate 2027 report page.
