Markets to Watch

Calgary is expected to lead all Canadian cities in economic growth in the coming years, according to Signal49. Real GDP growth is forecast at 2.4 percent in 2026 and 3.4 percent in 2027. Population growth, however, is expected to slow to 0.9 percent in 2026 and 1.0 percent in 2027, creating a divergence between economic momentum and demographic growth.

Calgary’s industrial market continues to tighten despite a substantial development pipeline. Several interviewees pointed to Calgary’s growing role as a western Canadian distribution hub and to logistics activity fuelling demand for well-located large- and small-bay space. Colliers reported an industrial vacancy rate of 3.0 percent in the second quarter of 2026, down from 4.1 percent a year earlier, with more than 3.4 million square feet under construction. Net absorption reached more than 1.5 million square feet during the quarter, with Colliers attributing much of the demand to large-bay distribution transactions. 

The residential market, meanwhile, is slowing after several years of rapid expansion. Several interviewees noted rising multifamily supply and growing vacancy pressures as key market trends. CMHC expects rental vacancy to rise from 5.0 percent in 2025 to 5.7 percent in 2026 and 6.2 percent in 2027 as new purpose-built rental supply enters the market and demand moderates. Calgary is the only Canadian market where rents declined, with Yardi data showing in-place rents down 1.9 percent year over year. Housing construction remains elevated, with 27,684 units recorded in 2025, although CMHC expects this will start to ease as developers proceed more cautiously and work through existing inventories. 

Calgary’s office market continues to recover, although improvement remains uneven. Several interviewees mentioned office investment opportunities tied to current valuations and improving leasing conditions. CBRE reported Calgary’s downtown vacancy rate inched downward in the second quarter of 2026, reaching 29.2 percent, as the market recorded 114,874 square feet of positive net absorption. CBRE attributed this improvement to increased leasing activity, declining sublease space, and the removal of inventory through conversion activity.

Conversions remain central to Calgary’s downtown recovery, but interviewees expressed differing views on how long the trend can extend. While some said residential conversions are a significant opportunity, others suggested that many remaining office buildings are difficult candidates for conversions because of deep floor plates and building-design limitations. They also noted conversion projects often depend on government incentives to proceed. 

The suburban office market is performing stronger than downtown, with vacancy at 16.0 percent and net absorption of 270,643 square feet in the second quarter, according to CBRE. 

Interviewees expressed positive sentiment around Calgary’s retail market. Indeed, while the headline data appears to show softness, the underlying story is more nuanced. CBRE reported a retail vacancy rate of 5.9 percent at the end of 2025, up from 4.3 percent, with negative net absorption of 481,000 square feet. But CBRE attributed nearly all of this negative absorption and much of the vacancy increase to space left by large department store brands. Excluding these vacancies, CBRE said the overall retail vacancy would have declined for a fifth consecutive half. This aligns with the positive sentiment voiced by interviewees, including expectations that the retail sector will gain strength in the year ahead.  

More broadly, interviewees pointed to renewed investor interest in Calgary. One interviewee said institutional investors are beginning to return to Calgary. Another said ultra-high-net-worth and private buyers are increasingly looking at Canadian real estate for diversification, particularly in Calgary, where they expect an eventual recovery. Another interviewee suggested private investors could be among Calgary’s most active buyer groups in 2027 given Alberta’s relative economic strength and competitive debt-financing conditions. Several interviewees also described Calgary as a more diversified economy than in past cycles, with one noting it’s no longer just an oil and gas market.

Toronto is navigating a period of modest economic growth, but several interviewees said they remain bullish on the city’s long-term fundamentals. Signal49 forecasts real GDP growth of 0.9 percent in 2026, reflecting the impact of a shrinking population—driven in part by lower immigration—a sluggish housing market, and shifting Canada-US trade dynamics. While these conditions are constraining near-term economic activity, the city’s real GDP growth is forecast to improve to 2.5 percent in 2027, supported by continued job gains in finance, insurance, real estate, and other professional services, according to Signal49. 

The city is also contending with a sharp demographic shift; its population growth moved from 2.4 percent growth in 2024 to a 1.7 percent contraction in 2025. Statistics Canada figures show net international migration to Toronto in 2024–2025 was half the level recorded in 2019–2020. Toronto has also moved from a net gain to a net loss of residents to other provinces. This is compounding an already-established pattern of residents moving to other communities within Ontario. According to Signal49’s forecast, Toronto’s population will contract further in 2026 and 2027. 

Interviewees identified industrial and logistics assets, data centres, reshoring-related manufacturing, purpose-built rental housing, and transit-oriented communities as areas of interest in anticipation of population growth resuming in three to five years. This suggests capital is gravitating toward sectors with long-term structural support despite near-term economic and demographic challenges. The recent privatization of a major real estate investment trust with significant holdings in the Greater Toronto Area underscores the growing role of institutional and foreign capital in the region and signals confidence in its long-term real estate fundamentals.

Toronto’s condominium market continues to face significant headwinds. Interviewees reported stronger prospects for low-rise product than high-rise projects, launch delays to 2027 or later, and a shift toward larger suites, phased launches, and end-user-oriented offerings. They also described continued investor interest in premium suburban and midtown nodes while noting downtown high-density sites remain more difficult to underwrite. Urbanation reported just 50 pre-construction condominium sales in the second quarter of 2026, down 80 percent year over year. At the same time, completed developer-held condominium inventory reached a record 5,001 units, while pre-construction and under-construction condominium inventory declined 37 percent year over year, Urbanation found. The current slowdown may have longer-term consequences: delayed launches and weak presales are narrowing the pipeline of projects that would otherwise begin construction later in the decade. 

These condominium-market conditions continue to weigh on housing construction. After hitting 37,718 units in 2024, total housing starts tumbled to 26,087 units in 2025 and are forecast to decline further in 2026 before stabilizing in 2027, according to CMHC. However, some of that decline is being offset by rental-oriented development. CMHC reports robust rental starts. Government financing programs and municipal incentives are expected to provide partial support, while some developers are exploring the conversion of condominium site applications to rental projects. This shift isn’t feasible for every site. It depends on land costs, approvals, financing, suite design, municipal charges, and achievable rents.

That reset to rental is creating a selective land opportunity. Development land in the Greater Toronto Area has repriced significantly from peak levels, and some investors are acquiring entitled or near-entitled sites with optionality between condo and rental outcomes. Others are pursuing covered-land strategies—acquiring income-producing assets where current cash flow supports the hold while retaining future redevelopment potential. But land remains difficult to finance, and recovery timelines are uncertain. The opportunity favours patient capital and flexible structures over speculative accumulation. 

The rental market is also adjusting to slower population growth. CMHC forecasts purpose-built rental vacancy will rise to 3.5 percent in 2026 before stabilizing at 3.4 percent in 2027 as growing supply coincides with weaker population growth and some higher-income renters move into homeownership. Flattening home prices are helping renters enter the ownership market. At the same time, those same stagnating property values are eroding the home-equity nest egg move-up buyers rely on, weighing on demand for new ground-oriented homes.

The office market is showing signs of recovery. Interviewees pointed to renewed activity associated with return-to-office mandates at many banks and law firms, as well as stronger demand for higher-quality buildings, with Class A and trophy assets outperforming lower-quality space. CBRE reported a downtown Class AAA vacancy rate of just 2.6 percent, compared to an overall downtown vacancy rate of 13.1 percent in the second quarter of 2026. CBRE also reports positive quarterly absorption and notes downtown recorded 4.6 million square feet of positive absorption and a 460-basis-point decline in vacancy over the 12 months ending in the second quarter of 2026. Suburban office conditions also improved, with vacancy falling to 20.2 percent and quarterly absorption reaching 458,284 square feet. Some owners are retrofitting vacant office suites to help attract tenants. 

Toronto’s industrial vacancy rate was the lowest in the country at the end of the second quarter. According to Colliers, vacancy measured 2.2 percent in mid-2026 after falling 70 basis points over the previous two quarters. Net absorption reached 3.5 million square feet in the second quarter of 2026. It also exceeded 2 million square feet for a third consecutive quarter, according to Colliers. The brokerage reports rents are beginning to stabilize. Asking rents—which stood at $16.22 a square foot in the second quarter—remain below prior peaks but are declining at a slower pace, while incentive packages are flattening.

Edmonton’s real estate market is being shaped by a combination of moderating supply growth and resilient demand. The city’s economy is supported by a broad base of government, health care, education, logistics, and service-industrial activity—a mix that sets Edmonton apart from Calgary. Signal49 said the city’s real GDP growth is expected to slow from 1.6 percent in 2025 to 1.1 percent in 2026 before jumping to 3.0 percent in 2027. Population growth has cooled as migration flows have declined, while the city’s unemployment rate is forecast to improve from 7.7 percent in 2025 to 6.7 percent in 2026 and 6.5 percent in 2027, according to Signal49. This reflects the growing number of jobs and demand for workers in the city, although some interviewees suggested a shortage of skilled labour could threaten Edmonton’s positive economic outlook. 

Edmonton’s industrial market remains one of the city’s strongest real estate stories. One factor to watch is the growing optimism around a new oil pipeline that, if built, will increase demand for industrial space. According to Colliers, industrial vacancy stood at 3.8 percent in the second quarter of 2026, falling below 4 percent for the first time in six quarters. One interviewee highlighted multi-level storage space as being in particularly high demand—especially when it’s tech-enabled and climate-controlled. More broadly, interviewees said the industrial market, particularly small- and mid-bay space, is undersupplied. One suggested this could lead to future rental growth. Colliers reported asking industrial net rents stood at $11.97 per square foot at the end of the second quarter, a 2 percent year-over-year increase, while more than 1.7 million square feet remained under construction. One interviewee said built-to-suit industrial space is moving forward, while speculative development remains limited.

The residential market, by contrast, appears to be moving from expansion toward balance. According to CMHC, housing starts totalled 21,337 units in 2025, with forecast ranges pointing to lower activity in 2026 and 2027. CMHC also expects apartment vacancy to rise from 3.8 percent in 2025 to 4.5 percent in 2026 and 5.0 percent in 2027 as additional supply enters the market, leading to softer rental-market conditions and more moderate rent growth. One interviewee suggested supply is reshaping market conditions, noting Edmonton may require additional time to find its footing because of overbuilding and oversupply concerns. But they also noted Edmonton hasn’t seen the same overbuild of speculative condos as some other cities, with many developers focusing instead on purpose-built rental in recent years. 

Office market conditions are improving, although the recovery remains uneven. According to CBRE, the Edmonton office market recorded positive net absorption of 35,389 square feet in the second quarter of 2026, contributing to a modest decline in vacancy to 18.9 percent. Downtown posted 80,569 square feet of positive absorption, outperforming the suburban market, which recorded negative absorption of 45,180 square feet. Return-to-office momentum is pushing tenants toward efficiently run, well-built space with strong amenities, interviewees said—driving disproportionate uptake in higher-quality buildings. Interviewees described the market as highly bifurcated, with leasing activity concentrated in Class A and AA buildings, with lower-quality Class B and C assets facing greater challenges. For older office assets, the path forward may mean recapitalization or an alternative use, such as conversion to residential. Feasibility depends on building design, location, and capital requirements. But interviewees said residential conversion remains difficult without compelling government incentives.

One interviewee observed institutional capital is re-entering Alberta’s markets. While Calgary tends to be the primary beneficiary initially, Edmonton, where investment activity is currently driven primarily by private capital, generally sees increased interest later.

Ottawa is expected to rank last among major Canadian cities for economic growth in 2026, according to Signal49, with real GDP forecast to decline 0.1 percent before rebounding to 1.4 percent in 2027. Yet survey respondents’ sentiments toward Ottawa run more positively than the economic data alone might suggest, with the city’s residential market showing fundamentals that compare favourably to other major markets.

The population is expected to contract by 0.1 percent in 2026 before recovering modestly to 0.2 percent in 2027. Signal49 attributes the outlook to expected federal spending cuts, public-administration job losses, and slower migration. While government workforce uncertainties may be limiting economic activity in the short term, the public sector is also a source of long-term resilience and new growth opportunities. 

These demographic and economic trends are beginning to influence Ottawa’s residential market. According to CMHC, housing starts reached 10,864 units in 2025 but are forecast to fall to a range of 7,700 to 9,500 units in 2026 and 7,800 to 9,600 units in 2027. CMHC says slower population growth, a large volume of units already under construction, and reduced permits and approvals are expected to weigh on future construction activity. Apartment projects remain the largest component of development activity, although CMHC expects the slowdown to affect that segment most significantly. In July 2026, Ottawa City Council approved a 54 percent reduction in residential development charges over three years, a move that could support housing construction as activity moderates.

Condominium development remains limited—a contrast to cities that have grappled with condo overbuilding. No condominium apartments were under construction in Ottawa at the end of the second quarter of 2026, according to Urbanation. The firm also reported approximately 4,000 purpose-built rental units were absorbed over the previous 12 months, roughly matching Toronto’s absorption despite Ottawa having a much smaller population. Even so, CMHC projects the broader rental market will loosen in the coming years. Vacancy is expected to rise from 3.0 percent in 2025 to 3.6 percent in 2026 and 3.8 percent in 2027 as new rental supply enters the market and population growth slows. 

Ottawa’s office market continues to post rising vacancy rates and negative absorption, according to CBRE. Total office vacancy reached 15.0 percent in the second quarter of 2026, up from 14.3 percent, while net absorption was negative 120,254 square feet. Vacancy in the city has now risen for four consecutive quarters. That pressure is not evenly distributed by building class. CBRE reports Class A vacancy in the central business district at 13.2 percent, compared with 16.3 percent for Class B and 33.9 percent for Class C. Lower-quality buildings are widely seen as bearing the brunt of the market’s softness, a trend often linked to the federal government’s shrinking appetite for older space. This points to a possible opportunity for repositioning.

CBRE also reported negative suburban absorption of 141,915 square feet in the second quarter. This marks a sixth consecutive quarter of negative absorption in that segment and more than 486,000 square feet of vacated space since the start of 2026. 

At the same time, Ottawa’s office market reflects a notable tension. Federal employees are returning to the office more frequently even as the federal government continues to reduce its real estate footprint. Several interviewees identified federal return-to-office policies as creating demand for office space, and one interviewee pointed to selective office re-engagement opportunities as pricing resets create potential acquire-and-reposition strategies.

Ottawa’s industrial market remains tight, according to Colliers. Vacancy held steady at 2.5 percent in the second quarter of 2026. Colliers noted leasing activity has been constrained by a shortage of functional industrial space, particularly small-bay facilities and properties with outdoor storage. The market also has roughly 3.3 million square feet under construction, much of it already pre-leased, suggesting supply constraints are likely to persist. 

Halifax is entering 2027 with slower economic and demographic growth than it’s experienced in recent years. Signal49 forecasts real GDP growth of 1.6 percent in 2026 and 1.8 percent in 2027, after a much stronger performance in 2025. The weaker outlook reflects uncertainty surrounding Canada-US trade negotiations, Signal49 says. In the short term, Signal49 projects population growth will remain stagnant with zero-to-negative growth in 2026 and 2027 due to lower immigration levels. Beyond that, interviewees said population growth in Halifax is set to rebound. Rising defence spending, shipbuilding, and naval activity, in addition to expanding port-related supply chains, could be another way growth reaches Halifax real estate, although the timing and scale remain uncertain.

The residential market in Halifax reflects a combination of slowing demand growth and persistent tightness. Housing starts are expected to ease significantly from the elevated levels reached in 2025, CMHC says, although activity is forecast to remain high by historical standards. Apartment construction remains the dominant component of new supply, but CMHC expects purpose-built rental development to moderate as population-driven demand cools and recent construction activity improves supply relative to current demand.  

Rental conditions are expected to loosen modestly as record completions come to market, with vacancy forecast to increase to 2.9 percent in 2026 and 3.1 percent in 2027. However, CMHC still expects vacancy to remain below the long-term average, keeping the market tight. That tension is reinforced by Yardi data showing Halifax recorded 5.7 percent in-place rent growth in the second quarter of 2026, the highest year-over-year in-place rent growth in Canada. Several interviewees said they expect that growth to continue at a relatively high rate, pointing to a persistent gap between in-place and asking rents.

Halifax has the lowest office vacancy rate among Canada’s major cities. According to CBRE, the city’s overall vacancy held steady at 9.0 percent in the second quarter of 2026. The downtown market has posted eight consecutive quarters of positive net absorption, CBRE reported, with demand concentrated in Class A properties while Class B and C properties experienced negative absorption. Halifax’s defence and naval role continues to support long-term tenant demand, according to CBRE, although the brokerage notes direct office requirements from the sector remain uncertain.  

Colliers reported Halifax had the highest industrial vacancy rate in Canada at 10.3 percent in the second quarter of 2026. While that rate was down from 11.1 percent the previous quarter, it remained elevated relative to historical norms. Quarterly net absorption was positive at 75,867 square feet, although Colliers noted year-to-date net absorption remained negative 31,486 square feet, tempering the improvement seen in the latest quarter. At the same time, the development pipeline in Halifax has effectively paused. With no active construction pipeline, current industrial vacancy could tighten again if demand from defence, logistics, or port-related activity accelerates.

Montreal’s real estate market is contending with a weak economic backdrop that’s shaping demand across asset classes. Real GDP growth is forecast to remain at 0.4 percent in 2026 before accelerating to 1.9 percent in 2027, according to Signal49. Population growth was negative 0.5 percent in 2025 and is forecast at negative 1.0 percent in both 2026 and 2027. Signal49 attributes the slower outlook to international trade uncertainty and reduced international migration. Despite weaker near-term economic conditions, interviewees described Montreal as one of the more attractive major Canadian markets for capital deployment, citing its scale, liquidity, and long-term investment appeal. This appeal is reinforced by Montreal’s diversified employment base, relative affordability, and role as a logistics hub. 

Residential construction remains elevated in Montreal, but the market is transitioning from record activity toward moderation as developers deal with higher vacancies in new units recently delivered. CMHC reports housing starts reached 27,777 units in 2025, including 25,223 apartment starts. Total starts are forecast to be between 23,000 and 28,000 units in 2026 before easing to 18,500 to 25,500 units in 2027. Rental housing continues to drive construction activity, accounting for 80 percent of new housing units. 

The rental market reflects both healthy demand and a growing supply pipeline. One interviewee described the sector as steady, resilient, and consistently solid. Even so, it’s expected to remain a tenant’s market for a few more years. At the same time, CMHC forecasts the rental vacancy rate will rise from 2.9 percent in 2025 to 3.8 percent in 2026 and 4.2 percent in 2027. CMHC attributes this increase to recently completed and under-construction units, an expected drop in permanent and temporary immigrants, and labour-market weakness. Several developers also said newly built units are taking longer to absorb than the citywide vacancy rate suggests. CMHC data backs this up: rental buildings completed between July 2022 and June 2025 carried an 8.4 percent vacancy rate in 2025—nearly triple the citywide figure. 

One interviewee also pointed to significant condo oversupply in Montreal. CMHC notes condominium starts are being dampened by high costs and limited presales, while rental housing continues to drive residential construction. Some of that oversupply is now being absorbed directly into the rental market. Private funds have recently been buying unsold condo units in bulk, at steep discounts to what developers originally sought. The expectation is that these units will operate as rentals until market conditions support a resale. 

Transit infrastructure is also shaping expectations for future development activity in parts of the Montreal region. This includes the Blue Line metro extension and a proposed tramway network, currently being studied, that would connect Montreal’s eastern boroughs and Repentigny to the existing metro network. These projects may create opportunities for residential transit-oriented development over time. In retail and mixed-use settings, an interviewee pointed to demand linked to the South Shore segment of the Réseau Express Métropolitain (REM), which opened in 2023, though they noted some of that impact has yet to be fully reflected in market activity. The REM’s planned airport connection, expected in 2027, could spur similar transit-oriented development elsewhere along the network. 

Montreal’s office market is showing signs of improvement, although vacancy remains relatively high. Interviewees described positive momentum in the office market, particularly for Class A assets. That sentiment exists alongside still-elevated vacancy rates, even as absorption has improved. CBRE reported that the overall office vacancy rate stood at 18.0 percent in the second quarter of 2026, while downtown vacancy was 16.9 percent. The downtown market has recorded three consecutive quarters of positive net absorption, according to CBRE. The brokerage firm also noted tightening at the top of the market, with Class AAA vacancy declining to 4.8 percent. 

The city’s industrial fundamentals continue to show encouraging signs. The market has now recorded two consecutive quarters of positive net absorption, according to Colliers, with the vacancy rate declining 10 basis points to 5.7 percent. Approximately 1,572,550 square feet remained under construction at the end of the second quarter. Average asking net rent was $13.94 per square foot after a modest decline—a level interviewees described as supportive of a steady, ongoing recovery. Longer term, the Port of Montréal Contrecœur terminal expansion could reinforce Montreal’s role in Canada’s trade diversification efforts and support future demand for warehousing, intermodal, distribution, and industrial facilities across the region. The project broke ground in April 2026 and is expected to increase the port’s capacity by 60 percent. 

A weaker demographic outlook is weighing on parts of Vancouver’s property market. Signal49 forecasts population growth will remain negative through 2027, even as real GDP growth estimates reach 1.5 percent in 2026 and 2.4 percent in 2027. Signal49 attributes the demographic weakness to lower levels of immigration. Interviewees described broad caution. Developers, in particular, are holding back on pursuing new projects. Investors are largely on the sidelines as well, although some said they were eyeing select opportunities such as repriced office assets and senior housing.

The demographic shift is showing up most clearly in the residential sector. CMHC expects housing starts to continue declining due to weak demand and high construction costs, with lower apartment construction accounting for much of the slowdown. Weak condominium demand and uncertainty around future price growth have slowed presales, according to CMHC. Interviewees also pointed to caution among developers and distress in parts of the condominium and high-rise land market. 

CMHC expects rental vacancy rates to continue rising as projects currently under construction are completed, while rent growth remains limited. One interviewee linked the softer demand environment to lower levels of immigration and fewer international students, while others pointed to short-term absorption challenges in the rental market. At the same time, some interviewees said a future supply gap is emerging in the multifamily pipeline. The rise in vacancy reflects supply now hitting the market. But high costs, weak presales, and development caution could shrink the multifamily pipeline well beyond this construction cycle, creating a future supply gap.

Vancouver’s office market continues to diverge, with Class A and AAA space, as well as downtown properties, outperforming the broader market. CBRE reported Metro Vancouver’s office vacancy rate was 11.6 percent in the second quarter of 2026, up 80 basis points, alongside negative net absorption of 84,314 square feet. Beneath the headline numbers, downtown Vancouver recorded positive absorption of 54,688 square feet, with leasing activity remaining above the five-year quarterly average, while suburban markets posted negative absorption of 139,002 square feet. 

Vancouver has the lowest downtown office vacancy rate among major Canadian cities at 12.2 percent, according to CBRE. Several interviewees expressed long-term confidence in Vancouver’s office market, citing interest in repriced assets, the appeal of core office properties, and the market’s liquidity.

Industrial rents have reset from their peak, but vacancies have remained steady. Colliers reported a vacancy rate of 3.1 percent in the second quarter of 2026, down from 3.2 percent the previous quarter, alongside positive net absorption of 241,785 square feet. Asking rents averaged $19.03 per square foot, down from their 2023 peak and 5.7 percent lower year over year. Even after this decline, Vancouver has the second-highest industrial rents in Canada, behind only Victoria, according to Colliers. Constrained industrial land, high replacement costs, and demand tied to port, airport, and regional distribution activity continue to support industrial fundamentals even as rents reset. Much of the new industrial supply expected to arrive later in 2026 and 2027 is substantially preleased, according to Colliers, limiting its impact on broader market availability. 

Retail remains one of Vancouver’s steadiest asset classes. Colliers reported urban retail vacancy of 3.0 percent and suburban retail vacancy of 0.8 percent. Grocery-anchored shopping centres have maintained vacancy below 1.0 percent for two straight years.

Resource investments, agriculture, mining, manufacturing, and a relatively affordable cost of living are helping to buoy Saskatchewan’s economy. Several interviewees expressed strong optimism about Saskatchewan’s outlook, describing the province as well-positioned for growth. That sentiment provides an important backdrop for Saskatoon, which led all Canadian cities in real GDP growth in 2025 at 3.6 percent. Signal49 expects that growth to moderate to 1.8 percent in 2026 and 2.1 percent in 2027, a trajectory it attributes in part to trade uncertainty and geopolitical tensions. 

The city’s demographic momentum is also slowing from recent highs. According to Signal49, population growth is forecast at 1 percent in 2027, following 0.8 percent growth in 2026. Signal49 noted reduced federal immigration targets have contributed to slower population growth. 

The slower growth is reflected in the residential market, although construction activity remains elevated. This includes work on the city’s largest residential complex. The $100-million, 474-unit project consists of two towers, the first of which was completed in 2026. According to CMHC, housing starts reached 3,812 in 2025 and are expected to remain within a range of 3,500 to 4,500 in 2026 and 3,300 to 4,700 in 2027. CMHC says the city’s purpose-built rental supply will continue expanding, supported by government incentives, projects already under construction, and ongoing apartment development. At the same time, rental demand is expected to grow more slowly, leading vacancy to rise from 3.3 percent in 2025 to a forecast 4.4 percent in 2026 and 4.7 percent in 2027 as new supply comes online, according to CMHC.

The office market in Saskatoon softened in the second quarter of 2026. According to Colliers, vacancy increased to 13.6 percent from 12.6 percent in the previous quarter, while net absorption was negative 32,897 square feet. Colliers attributed the shift in part to two new large listings and said tenant demand remained steady.  

Saskatoon’s industrial market remains tight despite a moderation in development activity. According to Colliers, vacancy declined to 2.5 percent in the second quarter of 2026 from 2.7 percent in the first quarter, while asking net rents continued to trend upward, increasing to $13.93 per square foot from $13.45 per square foot. The market is also benefiting from broader industrial investment, including construction of a new $51 million mining equipment manufacturing and servicing facility. Construction activity has eased compared with recent years. But Colliers says mid- to large-bay speculative construction is expected to rise in the second half of 2026 and expand the city’s industrial inventory through 2027.

Winnipeg is drawing attention from several Canadian real estate organizations that see significant opportunities in the city and have identified it as one of the top markets to watch in 2027. Interviewees also pointed to broader growth prospects across Manitoba and the Prairies, even as they noted attracting capital to Winnipeg and other secondary markets, particularly from international investors, can be challenging. Winnipeg’s relative affordability, central logistics position, and diversified employment base support a stable, income-oriented investment proposition, although smaller transaction sizes can limit liquidity.

Against this backdrop, Signal49 forecasts Winnipeg’s real GDP growth will accelerate from 1.2 percent in 2026 to 2.5 percent in 2027, even as population growth is expected to remain subdued, declining 0.2 percent in 2026 before returning to modest growth in 2027.  

The residential real estate market continues to see elevated levels of construction activity. According to CMHC, total housing starts are forecast to range from 5,600 to 6,500 units in 2026 and from 5,300 to 6,700 units in 2027, following 6,061 starts in 2025. CMHC says construction levels are supported by strong homeownership demand alongside government programs and incentives, favourable financing conditions, and zoning reforms supporting rental apartment development. In September, however, the provincial government expanded the number of rental units subject to rent-control rules by raising the monthly rent exemption threshold to $2,000, up from $1,670. CMHC forecasts the rental vacancy rate will rise from 4.4 percent in 2026 to 5.0 percent in 2027 as an expanding rental inventory coincides with reduced immigration levels.

Winnipeg’s office market posted mixed results in the second quarter of 2026, according to CBRE. Overall vacancy increased by 20 basis points to 16.0 percent, while net absorption was negative 46,360 square feet. However, conditions improved in the downtown market, where vacancy declined by 10 basis points to 17.5 percent and net absorption was positive 15,552 square feet. Downtown Class A space also continued to strengthen, with the vacancy rate declining by 20 basis points to 12.7 percent and positive absorption reaching 7,314 square feet. CBRE reported this was the fifth consecutive quarter of positive absorption in Winnipeg’s downtown Class A market. This points to a localized flight to quality rather than a broad-based market recovery. 

Winnipeg’s industrial market continues to show stable fundamentals. According to Colliers, the vacancy rate held steady at 2.9 percent in the second quarter of 2026, despite two significant vacancies that continue to weigh on market conditions, while net absorption reached 145,119 square feet—the third consecutive quarter of positive absorption.

Quebec City is entering a period of slower economic and population growth, but targeted development activity and major infrastructure investments continue to support parts of its real estate market. Data centre construction, transit investments, and a port modernization project are shaping a distinct investment profile for Quebec City.

Interviewees pointed to improving conditions, although this optimism sits against a softer near-term backdrop. After growing 1.0 percent in 2025, real GDP is forecast by Signal49 to slow to 0.7 percent in 2026 before improving to 1.7 percent in 2027. Signal49 also expects weaker near-term population dynamics tied to slower international migration, with the population forecast to contract in 2026 and remain flat in 2027. 

The city’s residential real estate market is adjusting to these demographic trends. According to CMHC, total housing starts are expected to decline from 8,583 in 2025 to a forecast range of 5,900 to 8,500 in 2026, before stabilizing at 6,000 to 8,600 in 2027. CMHC said the expected decline is being driven largely by the City of Lévis moratorium on issuing new residential construction permits in certain areas, with planned North Shore multi-unit projects not expected to fully offset weaker activity on the South Shore. Rental market conditions are also expected to ease. CMHC forecasts the vacancy rate will rise from 2.4 percent in 2025 to 3.3 percent in 2026 and 3.9 percent in 2027, which it attributes to a decrease in temporary residents and an increase in new rental supply. 

Transit investments could affect future residential development patterns. These include the $7.6 billion TramCité project, which is expected to spur the construction of thousands of new homes, particularly near stations. One interviewee referenced the project’s route and future station connections in Saint-Roch, highlighting local attention on how transit expansion could shape development and connectivity in areas served by the network.  

The industrial market continues to recover after a period of softer leasing activity. According to Colliers, Quebec City recorded 48,096 square feet of net absorption in the second quarter of 2026, marking a second consecutive quarter of positive absorption, while vacancy fell from 5.0 percent to 4.9 percent in the second quarter of 2026. Colliers noted demand has remained firm for functional, well-located space despite economic uncertainty. 

The industrial market is also characterized by a substantial development pipeline, with approximately 1.3 million square feet under construction in the second quarter of 2026. Data centre developments account for most of this activity, according to Colliers. The ability to continue to convert data centre demand into sustained development will depend on reliable power, grid capacity, fibre connectivity, cooling, approvals, and community support. Longer term, broader industrial development could benefit from major infrastructure investments, including the $1.7 billion Port of Québec modernization plan. 

The performance of Quebec City’s office market remains mixed. According to CBRE, vacancy stood at 12.9 percent in the second quarter of 2026, while the market recorded 83,479 square feet of positive net absorption. CBRE noted leasing activity was uneven across building classes, with Class B properties outperforming other market segments as occupiers sought more affordable space. CBRE also reported office-to-residential conversion activity is accelerating, with acquisitions happening for conversion purposes. A similar shift is underway in retail, where some shopping malls are being transformed for office or residential use.