Investor Confidence Holds Steady in Canada's Multi-Suite Residential and Commercial Real Estate Markets in Q2 2025: Morguard
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Multi-suite residential rental transaction volume rose in the second quarter after a slower start to the year. A total of
While rental demand is expected to moderate in the coming quarters, partly due to lower immigration and temporary worker targets and increased first-time homebuyer activity, asking rents are projected to climb through next year as newly constructed supply enters the market.
High-quality industrial opportunities, such as logistics and warehouse properties, remained highly attractive to investors. Approximately half of the industrial properties sold were purchased by users, many of whom opted to buy space instead of paying elevated lease rates. Private capital groups also remained active by targeting acquisition opportunities in a less competitive market.
The Canadian office leasing market remained relatively stable in the second quarter. Trophy assets remained popular among tenants seeking highly-amenitized spaces in core locations. Office rents were also relatively stable with modest upward pressure reported for space in trophy buildings.
Retail investment activity moderated in the second quarter following a strong start to the year. Several large transactions were completed earlier in 2025, and sales of retail properties have remained surprisingly brisk over the past year.
Economic Factors
"While global economic conditions continue to evolve, the Canadian real estate market is showing encouraging signs of stability," said
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- Investor interest in multi-suite residential rental assets remained strong, supported by healthy fundamentals.
- Office leasing market conditions stabilized, with demand focused on high-quality and amenity-rich buildings.
- Industrial availability rose with the delivery of new supply while user and investor interest in space for logistics remained firm.
- The
Bank of Canada will need to strike a balance between supporting economic growth and maintaining inflation stability amid ongoing trade uncertainty.
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