Nine in 10 market experts expect activity to hold or rise through year-end, signalling a potential turning point for property-heavy portfolios
Canadian commercial real estate is showing renewed resolve heading into the second half of 2026, according to new data from global real estate advisory firm Avison Young.
The firm's 2026 Canadian Mid-Year Outlook, drawn from a survey of more than 200 Avison Young professionals conducted in June 2026, found that 96 per cent of respondents expect commercial real estate market activity to either increase (49 per cent) or remain stable (47 per cent) through the remainder of the year.
That compares with 45 per cent expecting increased activity at mid-year 2025, a four-percentage-point year-over-year improvement that points to a market gradually finding its footing.
"Across Canada, we're seeing markets become more actionable and decisive. Economic and geopolitical uncertainty remain, but occupiers and investors are more willing to move forward where fundamentals are strong," said Mark Fieder, Principal and President of Avison Young Canada, based in Toronto. "The second half of 2026 is shaping up to be less about waiting for certainty and more about executing on opportunity."
The survey results reflect a market that is neither euphoric nor stalled. Sentiment in Toronto, Ottawa, Calgary, and Edmonton has stabilised since the start of 2026, while Vancouver and Montréal are showing notably stronger enthusiasm.
Quality is emerging as the clearest differentiator, with high-quality and value-add properties drawing the most investor and occupier attention. Interest rates and financing conditions remain key considerations, and capital continues to gravitate toward assets with resilient income streams and strong operational performance.
That environment tends to reward active managers and institutional-grade product, which may shape conversations advisors have with clients evaluating private real estate or listed real estate vehicles.
Development uncertainty shifts shape
One of the more notable findings in the mid-year outlook is a shift in what developers identify as the primary source of risk.
For the first time, costs and tariffs dropped from first to second place as the leading reason for potential project delays or pauses, declining nine percentage points since the annual outlook and 11 per cent year-over-year. In their place, risk concerns broadly defined rose to the top, cited by 25 per cent of respondents compared with 15 per cent previously.
That shift suggests the industry has largely absorbed the financial shock of elevated input costs and trade-policy uncertainty and is now wrestling with more nuanced project-specific risk assessments. The Avison Young report flagged a US trade announcement made in the same week as a "must watch" development, noting that tariffs remain a fluid variable in any development calculus.
Marie-France Benoit, Principal and Director of Market Intelligence at Avison Young Canada, said the firm broadened the respondent base for this edition of the outlook to include valuation and property management professionals alongside traditional brokerage teams; a change designed to give a more comprehensive read on market conditions across service lines.
"By incorporating a wider view across service lines, Avison Young can share a truly holistic, comprehensive snapshot of the commercial real estate landscape," Benoit said. "This gives us key, measurable insights that strategically navigate clients through their critical business and real estate decisions."
