Immigration reset and new federal funds reshaped multifamily potential and risk last year
Canada’s multifamily market ended 2025 on firmer footing, with investment activity recovering from its 2023 trough even as policymakers moved to cool population growth and rewire the supply side of housing.
Avison Young’s latest national report pointed to rising sales volumes, higher average prices per unit and more units changing hands across the six largest metropolitan areas, led by Montréal.
The rebound sat alongside a notable shift in who was buying. According to the report, private investors accounted for 65% of 2025 sales volume in the country’s six major markets, compared with a seven‑year average of 56%, while institutional buyers’ share was roughly halved over the same comparison period.
“Demand remains resilient – particularly for assets that demonstrate consistent cash flow and strong cost controls,” Avison Young said, highlighting sustained appetite for “well‑maintained vintage apartments with affordable rents and significant rental upside.”
The firm added that there had been “a shift in investor preference to hold on to these existing rental assets, seeking the stable cash flows they provide amid high replacement and development costs.”
On the policy front, Ottawa’s new immigration targets and housing programs are poised to reshape demand forecasts and capital flows.
“A total of 380,000 permanent residents will be allotted annually over the next three years, compared to 395,000 in 2025,” the report said, with temporary resident targets cut to 385,000 in 2026 and 370,000 in 2027 and 2028.
Immigration was described as “Canada’s primary driver of household growth, which in turn spurs rental demand,” making the new caps critical for underwriting assumptions.
Budget 2025’s Build Communities Strong Fund, to be administered by Housing, Infrastructure and Communities Canada, would deploy “$51 billion over 10 years and $3 billion recurring” to remove infrastructure bottlenecks and support higher‑density, amenity‑rich urban development, Avison Young said.
Provinces and territories receiving funding would be required to “substantially reduce development charges and not levy other taxes hindering the housing supply,” a condition that, if enforced, could materially improve project feasibility in higher‑cost markets.
At the same time, the federal government’s Build Canada Homes initiative would allocate $1.5 billion to extend the Rental Protection Fund, first launched in 2024.
The fund “provides loans/contributions to the community housing sector to acquire apartments and preserve affordability of rents over the long‑term,” potentially unlocking trades of older, capital‑intensive stock more often shunned by private buyers.
In a separate spring 2025 outlook, Avison Young described a “strong multifamily market in Quebec, driven by private investors and supportive rental policies,” even as other commercial asset classes softened.
This article is part of CMP’s Commercial sector focus for January, spotlighting the commercial mortgage market and the key trends and issues facing the space in 2026. Find all the rest of our special coverage here.
