Intelligent Investment
Canada Real Estate Market Outlook 2026
February 3, 2026 35 Minute Read
Welcome to CBRE’s 2026 Canadian Real Estate Market Outlook
‘Uncertainty’ was the operative word for much of last year, and while it will continue to be used in 2026, a clearer narrative is beginning to emerge. Looking past the transient noise and reactionary headlines, commercial real estate fundamentals are quietly gaining momentum. The office market has stabilized, the industrial market is stabilizing, and retail is resurging, albeit unevenly. While multifamily faces some short-term headwinds, its long-term structural tailwinds remain unshaken.
Real estate is cyclical and, in aggregate, the Canadian landscape is well-positioned. However, softness persists in the condominium market, and the forthcoming CUSMA review remains a pivotal variable in the national economic outlook.
Real estate is also an industry where success requires a long-term lens. Amidst heightening geopolitical tensions and global volatility, Canada’s safe haven status remains highly coveted. Our market may only account for 3-4% of global commercial real estate, yet it is underpinned by G7-leading growth metrics, accessible debt markets, and a disciplined new supply pipeline. These are the foundations of long-term success.
Marc Meehan
Managing Director, Research
Executive Summary
The Canadian Economy will likely face persistent uncertainty in 2026 as tariffs and CUSMA negotiations weigh on Canada’s growth outlook. GDP growth is forecast to slow and the Bank of Canada is expected to remain on hold throughout the year.
Capital Markets activity is expected to accelerate in 2026 as greater participation from all capital sources, particularly institutional investors, drives higher volumes. Office sentiment has notably rebounded and cap rates have likely peaked and are projected to hold steady.
The Office market will enter a phase of sustained growth in 2026, spurring increased occupier urgency. While the recovery will remain geographically uneven, supply scarcity for high-quality assets will necessitate proactive decision-making as firms compete for premium, well-located, and highly amenitized space.
Retail performance will remain steady but vary across segments and geographies in 2026. Transformation is on the horizon, driven by the continued adoption of AI, along with the reimagining of the former HBC spaces.
The Industrial market is set to stabilize in 2026 and move closer towards a recovery as availability rates plateau and asking rents reach a floor. Net leasing activity is poised to rebound back to historical norms while new supply is on track to taper off.
2026 will be a transition year for Multifamily as softer demand and continued new supply lifts vacancy rates higher. Total market rent growth is forecast to decelerate further and incentives remain prevalent in some markets.