Multi-suite residential sales are surging and core real estate sectors stay resilient
Investor sentiment in Canada’s multi-suite residential rental market stayed buoyant in the second quarter of 2025, even as broader real estate transaction volumes fell to a five-and-a-half-year low.
Morguard’s newly released 2025 Economic Outlook and Market Fundamentals Second Quarter Update reveals that multi-suite residential rental property sales climbed 39.4% quarter-over-quarter to $812 million, bolstered by strong demand for concrete high-rises, newly constructed buildings, and assets with rent upside potential.
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“Canada’s real estate market continues to be supported by solid fundamentals that foster long-term optimism and growth,” said Angela Sahi, President and Chief Operating Officer of Morguard. “Even amid market volatility, investor interest in high-quality industrial and office properties remains strong.”
The report notes that while rental demand may ease due to reduced immigration targets and rising first-time homebuyer activity, asking rents are still expected to climb as new supply enters the market.
In industrial real estate, user purchases accounted for about half of all transactions, with many buyers opting to own space rather than lease at elevated rates.
Private capital groups also remained active, capitalizing on a less competitive market. Industrial availability rose to 5.3%, a seven-year high, as more than 7 million square feet of new space was completed in the quarter.
Office leasing conditions stabilized, with national vacancy holding at 18.7%.
Trophy assets, those high-quality, amenity-rich spaces in prime locations, remained the most sought-after, and while overall demand is still below pre-pandemic levels, construction activity has slowed dramatically, easing upward pressure on vacancy rates.
Retail investment activity moderated following several large early-2025 transactions, though sales volumes have been “surprisingly brisk” over the past year.
“While global economic conditions continue to evolve, the Canadian real estate market is showing encouraging signs of stability,” said Keith Reading, senior director, Research at Morguard. “With balanced fundamentals and continued investor interest in core sectors, the outlook for the second half of 2025 remains positive.”
