In Q2 2024, the Canadian commercial real estate market saw a resurgence, as investment volumes rose by 67.4% from the previous quarter, reaching $14.5 billion. This strong recovery wasn’t merely a rebound from the typical ebb and flow of market activity; it was driven by a combination of factors, most notably a rush of property sales pushed through before the June 24th capital gains tax change deadline, which brought the highest investment totals since Q2 2022, according to BCRE’s Canada Investment Overview Q2 2024.
Growth in Most Asset Classes
Most asset classes experienced this renewed energy. The industrial sector led the way with a robust $4.5 billion in investments. This reflects an ongoing trend toward the expansion of logistics and warehousing, driven by the evolution of e-commerce and global supply chains. As businesses look to optimize their operations, industrial properties have become highly sought after, further solidifying their position in the market, according to the report.
The multifamily sector also experienced notable growth, reaching a nine-quarter high of $3.5 billion in investments. This surge speaks to broader societal trends. With increasing urbanization and a growing demand for rental housing, investors are recognizing the stability and long-term potential of multifamily properties. The rising cost of homeownership in major cities has shifted focus to the rental market, which continues to expand, making this sector an attractive and resilient option.
Retail properties also had notable growth, with investment volumes nearly doubling compared to the previous quarter, totalling $2.6 billion. Despite challenges posed by online shopping for retail real estate, certain retail formats—especially those in prime locations or integrated into mixed-use developments—are drawing renewed interest. Investors are betting on the adaptability of these spaces, particularly as consumers increasingly seek out experiences and community-oriented shopping.
In contrast, office investment volumes rose only modestly, reaching just over $1.0 billion. Work-from-home arrangements continue to have an impact, but certain acquisitions, such as the $232.5 million purchase of the Corus Quay building by George Brown College, indicate that prime office spaces in key locations still hold appeal.
Decreasing Foreign Investment
While domestic investors dominated the scene, accounting for 76.3% of acquisitions, foreign capital inflows dwindled. Global investment into Canadian real estate fell to its lowest level since Q1 2021, totalling just $353.2 million in Q2. This decline suggests that while Canadian investors see clear value and opportunity within their borders, international buyers are more cautious, possibly due to exchange rates, geopolitical uncertainties, or other concerns.
Regional Growth
Regionally, the recovery was widespread. Toronto, Montreal, and Vancouver all posted strong increases in investment activity according to the report, with each market exceeding $1.0 billion in growth compared to the previous quarter. Montreal led the charge, with volumes growing by an impressive 164.4%, while Toronto remained the largest market by total value, reflecting its continued status as an economic and financial hub.
As part of its response to Canada’s ongoing housing challenges, the federal government has added another 12 new properties to the Canada Public Land Bank,...
As part of its response to Canada’s ongoing housing challenges, the federal government has added another 12 new properties to the Canada Public Land Bank,...
