Balancing Uncertainty with Long-Term Growth
WealthShare REIT 2025 Market Outlook
As we step into 2025, Canada’s multifamily housing sector finds itself navigating a complex landscape. Near-term uncertainty, especially for newly completed high-end units, is tempered by strong long-term fundamentals and ongoing housing needs. Despite some headwinds, the overall outlook remains constructive, particularly for more affordable rental segments.
Short-Term Market Dynamics
Immigration curbs and potentially lower population growth may put downward pressure on rental demand in 2025 and 2026. However, the demand for affordable housing remains resilient due to Canada’s ongoing affordability crisis and a substantial amount of pent-up demand built up over recent years.
As a result, developers are expected to temporarily pause new construction starts, allowing the market to absorb recently delivered supply. Rent growth for high-end, newly completed multifamily units faces the most pressure, with higher vacancy rates and cautious tenant demand likely to lead to price adjustments.
Resilience in Accessible Market Segments
On the other hand, the most accessible segments of the rental market—those offering relatively lower rents—are expected to perform more steadily. Vacancy rates in these segments should remain healthy, and rent growth is likely to be flat or modestly inflationary, especially in metro areas experiencing in-migration, such as parts of the Prairie Region.
Alberta: A Construction Bright Spot
Alberta’s housing market continues to shine. The province is projected to see $24 billion in construction activity in 2025, with over 80,000 new homes coming to market. Multifamily dwellings will account for about 55% of that figure, signalling sustained investor and developer confidence in Alberta’s rental housing sector.
Long-Term Outlook Remains Solid
Despite short-term volatility, the broader picture for multifamily housing is encouraging. Market rents, even with modest potential declines in 2025, remain well above 2022 levels. As supply stabilizes and population growth resumes, rent trends are expected to normalize and continue reflecting strong long-term fundamentals.
Bottom Line
2025 will be a year of adjustment, particularly for new multifamily developments, but Canada’s structural demand for rental housing - driven by affordability challenges and demographic trends - will continue to support the sector well into the future.