The old expression that a good, solid investment is “safe as houses” is under pressure in today’s volatile economy, as investors ponder whether owning tracts of townhouses or apartments are good long-term bets. But experts say that for large-scale commercial real estate investors, mixed-use residential properties are still worth considering.
“Residential can make sense if you look at a 10-to-15-year timeline, which is what large-scale investors do,” says Adam Jacobs, head of research at Colliers Canada in Toronto.
“These aren’t day-trading types of investments,” he adds.
Jacobs acknowledges that investing in residential can be more challenging than in many other commercial real estate sectors right now. That is because the global economy appears to be particularly unsettled these days, with upsetting factors that include ongoing wars in the Middle East and between Russia and Ukraine, as well as tense and still unresolved trade issues, including the future of the Canada-United States-Mexico Agreement (CUSMA).
“I would agree that, say, a year ago, people felt a bit more optimistic that we’d return to a more normal economic environment,” Jacobs says. For example, the prospect of interest rate cuts is dim right now compared with even a few months ago. The U.S. annual inflation rate hitting 3.8 per cent in April and little sign that energy prices are about to come down soon.
As gas and heating prices skyrocket and inflation picks up, “there aren’t going to be nine rate cuts coming,” Jacobs says. “These aren’t the good old days.”
Earlier in 2026, there did appear to be investor confidence in residential real estate investment. Colliers’ Greater Toronto Area Multifamily Report for the first quarter reported “strong momentum, as transaction volume climbed to $569 million across 20 trades.” That represented a 228.7 per cent year-over-year increase.
“Total suites traded [in the GTA] rose to 1,934 units, up 248.5 per cent, signaling a meaningful rebound in market activity as improved financing visibility and narrowing bid-ask spreads helped bring both buyers and sellers back to the table,” the Colliers report said.
There aren’t going to be nine rate cuts coming. These aren’t the good old days.
Adam Jacobs, Colliers Canada
“The market is clearly showing renewed depth, with stronger participation from both private and institutional capital,” the report added.
“Despite the sharp rise in volume, average pricing per suite remained stable at $289,047, up 0.4 per cent year-over-year, suggesting that values have largely stabilized following the repricing cycle experienced over the past 12 to 18 months.”
There is still an acute shortage of affordable housing in both Canada and the U.S., Jacobs says. But construction costs have also been going up, and the market for new residential properties is also being affected by demographic changes.
“Up to a few years ago, it was fairly easy to forecast population growth with some accuracy,” he explains. “Canada went from 35 million people to 40 million and then we figured we would get to 45 million, which would mean more demand for housing and then for the retail and the commercial and industrial properties needed to support a growing population.”
But last year, Canada’s population actually shrank year over year—for the first time since Confederation. Statistics Canada reported that the number of citizens, landed immigrants and non-permanent residents in Canada stood at 41,472,081 on Jan. 1, 2026, down 0.2 per cent, or just more than 102,000 people, from Jan. 1, 2025.
Even in a sluggish market, investors in new residential properties have the advantage of being able to look to government funding.
David Israelson
At the beginning of this year, CBRE predicted in its 2026 Canada Real Estate Outlook that this would be a “transition year” for the multifamily market.
“Demand is expected to remain soft in 2026 amid Canada’s [more restrictive] immigration policies and projections for total population to contract over the next two years. Meanwhile, new supply will continue to be elevated and lift vacancy higher,” CBRE said.
With a lower population and continued tighter immigration policies, residential rents fell across major metropolitan areas in 2025, the report adds. Average rents this year may rise, but less aggressively than several years ago, when demand for apartments was higher. “Some markets will continue to see a prevalence of incentive packages, especially on new builds, as landlords look to boost their occupancy rates,” according to CBRE.
Even in a sluggish market, investors in new residential properties have the advantage of being able to look to government funding, for example through Canada Mortgage and Housing Corp.’s (CMHC’s) Affordable Housing Fund and Apartment Construction Loan Program.
“You can’t go to CMHC to borrow tens of millions to build an office tower, but you can for apartments, and you may be able to get a lower-cost loan or to amortize it for longer than a straight commercial loan,” Jacobs says.
One other potential bright spot in the residential sector for large-scale investors is seniors’ housing, CBRE’s report says: “A rapidly aging Canadian population is driving exceptional tailwinds in the asset class. Demand will surge over the coming years and continue to support double-digit rent growth that outpaces expense growth.
“Despite growing demand,” the report adds, “new supply is expected to remain limited given the significant gap between current market rents and the rents needed to make new construction financially viable. In 2026 and beyond, competition for seniors housing assets is expected to intensify as more investors seek to enter this compelling asset class.”
The key for long-term investors is simply that: Think long-term, says Michael Le Coche, vice-president of research and predictive analytics at Fiera Real Estate.
“Cyclically, both industrial and multifamily real estate have weakened in the last five years. But you’re buying for the next 10 years,” he told a Colliers-produced economics podcast in early May 2026.
“But we believe that these two asset types continue to have rental growth at rates faster than inflation,” Le Coche says.
David Israelson is a writer, editor, consultant and non-practising lawyer. He is principal of Eon Communications and Research, which he founded after more than a decade as a senior public relations executive. David contributes regularly to national and international print and online publications in addition to corporate and institutional writing across all media. He writes extensively on business, finance and investment, sustainability, conservation, energy, housing and land-use planning, international trade, travel and transportation politics and real estate, among other areas.
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