Canada Multifamily National Report
Ongoing Population Growth Drives Apartment Demand, Elevated Borrowing Costs and In-Office Work Fuel Additional Rental Needs
Prospect of soft landing allows for healthy apartment demand. After rapid interest rate hikes, the Bank of Canada is now holding its overnight rate steady as the Canadian economy works through the tightened financial environment. Elevated interest rates have significantly weighed on private consumption and corporate investment, as households reduce spending and businesses slow expansion in the face of rising debt-servicing costs. Canada’s labour market, however, remains robust, which is evident in continued job creations and low levels of unemployment in early 2023. Many laid-off workers have been able to regain employment quickly as job vacancies continue to outnumber available workers. The labour market resilience implies that a soft landing, or a moderate deceleration in economic activity without a significant rise in joblessness, now appears to be a more likely outcome for 2023. This outlook, if materialized, will create a more favourable environment for rental demand in 2023.