Canadian Multifamily Real Estate Outlook for 2026: Trends and Opportunities

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In 2025, the Canadian multifamily market demonstrated resilience despite moderating rents, muted immigration, and rising unemployment. The anticipated wave of project deliveries materialized, resulting in a temporary supply overhang across several major markets, including Ontario and British Columbia. Concurrently, slower population growth and elevated unemployment among young adults limited household formation, tempering demand. As a result, national vacancy rates increased and asking rents moderated across most major metropolitan areas.¹ In response, developers began to scale back new starts to allow demand to absorb excess supply. Notwithstanding these cyclical headwinds, multifamily investment volume outpaced other asset classes in Q4 2025, as investors maintained a constructive long-term outlook for the sector.²

Chart 1: Investment Volume by Asset Class²

A Shift Toward Stability: Market Fundamentals Outlook

This year, the multifamily sector is expected to continue working through a softening period due to supply overhang and weaker rental demand amid population growth slowdowns.  Although new rental supply is forecasted to decelerate in 2026, vacancy rates are projected to edge higher at the national level. Average two-bedroom rents are anticipated to continue increasing modestly; however, this growth is largely attributable to the turnover of below-market units resetting to prevailing market rates, rather than broad-based rent acceleration.¹

Chart 2: Multifamily Forecast¹

While national conditions remain influenced by cyclical pressures, performance continues to diverge regionally, presenting selective opportunities. Alberta, having experienced rapid population growth in recent years, is expected to continue benefiting from domestic in-migration, thereby supporting rental demand.³ Notably, Statistics Canada forecasts that Alberta will overtake B.C. as Canada’s third most populous province in just over a decade.⁴ This demographic shift is anticipated to help moderate vacancy rates across the province.

Favourable Investment Backdrop

Even as multifamily works through cyclical headwinds, investor sentiment remains positive. Investment activity, alongside supply influxes, has continued to expand over the last few years, with apartment buildings accounting for roughly 30% of all transactions by late 2025.³ 

Compared with homeownership, renting continues to be a more affordable option for many Canadians, supporting rental demand amid the ongoing housing shortage. Additionally, the favourable policy environment, with initiatives such as Build Canada Homes as well as the Apartment Construction Loan Program (ACLP), continues to encourage new developments. In tandem, affordability and ongoing government initiatives support positive investor sentiment of a long-term investment backdrop.

Chart 3: Difference Between Average Monthly Rental and Mortgage Payments⁵

Methodology: – Average rent figures represent the combined average of 1-bedroom and 2-bedroom unit prices, courtesy of Rentals.ca, January 2026 report. – Underlying pricing data was sourced from the Canadian Real Estate Association (CREA) and local boards, including the Calgary Real Estate Board (CREB), the Toronto Regional Real Estate Board (TRREB), and Greater Vancouver Realtors.⁵

The Debt Market Advantage in Today’s Economy

For investors seeking exposure to the multifamily sector, debt-focused strategies, particularly senior and bridge financing, can provide a more defensive entry point as the market works through cyclical normalization. With capitalization rates stabilizing, lenders are often originating loans at more attractive rates.

Floating-rate bridge loans, typically structured with 24- to 36-month terms and extension options, offer shorter-duration exposure and income streams that adjust alongside prevailing interest rates. When underwritten with prudent leverage and supported by experienced sponsors, these investments can prioritize capital preservation while generating compelling risk-adjusted returns.

Although each transaction is inherently distinct, durable long-term demand for rental housing continues to support disciplined lending opportunities across Canada’s multifamily sector.

The Peakhill Advantage

Having financed over $18.5B since inception, Peakhill Capital is an industry leader in the multifamily lending space. We remain committed to providing flexible financing solutions, offering term, bridge, construction, and CMHC lending options across Canada. Working alongside our clients, we align our financing solutions with project-specific requirements and ever-changing market conditions.

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Footnotes

1. CBRE. 2026. Canada Real Estate Outlook 2026. ↩︎
2. Cushman & Wakefield. 2026. Canadian Cap Rate & Capital Markets Report Q4, 2025. ↩︎
3. Marcus and Millichap. 2026. 2026 Canada Investment Forecast. ↩︎
4. CBC. 2026. Alberta’s population could surpass British Columbia’s as early as 2038: StatsCan. ↩︎
5. Zoocasa. 2026. Decoding Canada’s Price-to-Rent Ratios in 2026. ↩︎