Key Takeaways
- • Ninety-six percent of Canadian commercial real estate market experts surveyed by Avison Young expect activity to either increase (49%) or remain stable (47%) through year-end 2026, representing a significant four-percentage-point improvement from mid-year 2025 when only 45% anticipated increased activity.
- • Regional sentiment divergence is evident, with Toronto, Ottawa, Calgary, and Edmonton stabilizing since early 2026, while Vancouver and Montréal demonstrate notably stronger investor enthusiasm, suggesting geographic selectivity in capital deployment.
- • High-quality and value-add properties are emerging as the clearest differentiators attracting investor and occupier attention, with capital gravitating toward assets demonstrating resilient income streams and strong operational fundamentals regardless of broader macroeconomic uncertainty.
- • Market participants are shifting from a wait-and-see posture to active deal execution, with Mark Fieder, Principal and President of Avison Young Canada, noting that occupiers and investors are "more willing to move forward where fundamentals are strong" despite persistent economic and geopolitical headwinds.
- • Interest rates and financing conditions remain material considerations for capital allocation, though improving credit conditions and stabilizing borrowing costs are enabling more decisive market activity in the second half of 2026.
Summary
Canadian commercial real estate is demonstrating renewed momentum heading into the second half of 2026, according to Avison Young's 2026 Mid-Year Outlook, which surveyed over 200 firm professionals in June 2026. The data reveals a meaningful inflection point in investor and occupier sentiment, with 96 percent of respondents expecting market activity to either increase or hold steady through year-end. This represents a notable improvement from mid-year 2025, when only 45 percent anticipated increased activity—a four-percentage-point year-over-year gain that signals gradual market stabilization after prior weakness.
The survey reveals a market character best described as neither euphoric nor stalled. Sentiment stabilization is evident in major markets including Toronto, Ottawa, Calgary, and Edmonton, while Vancouver and Montréal are exhibiting notably stronger enthusiasm. This regional divergence underscores the importance of localized market fundamentals in driving capital decisions, with investors increasingly discriminating based on specific asset quality and occupier strength rather than applying blanket sector positioning.
According to Mark Fieder, Principal and President of Avison Young Canada, the market transition reflects a meaningful behavioral shift among participants. "Across Canada, we're seeing markets become more actionable and decisive. Economic and geopolitical uncertainty remain, but occupiers and investors are more willing to move forward where fundamentals are strong," Fieder stated. "The second half of 2026 is shaping up to be less about waiting for certainty and more about executing on opportunity." This characterization suggests that decision-making is increasingly driven by asset-specific merits rather than macro timing considerations.
Quality has emerged as the dominant differentiator in capital allocation patterns. High-quality and value-add properties are drawing the most investor and occupier attention, with capital gravitating toward assets featuring resilient income streams and strong operational performance. Interest rates and financing conditions remain key considerations for deployment, though the stabilization of credit markets appears to be enabling more decisive capital movement compared to earlier periods characterized by tighter lending conditions and higher refinancing risk.
The survey reveals a market character best described as neither euphoric nor stalled. Sentiment stabilization is evident in major markets including Toronto, Ottawa, Calgary, and Edmonton, while Vancouver and Montréal are exhibiting notably stronger enthusiasm. This regional divergence underscores the importance of localized market fundamentals in driving capital decisions, with investors increasingly discriminating based on specific asset quality and occupier strength rather than applying blanket sector positioning.
According to Mark Fieder, Principal and President of Avison Young Canada, the market transition reflects a meaningful behavioral shift among participants. "Across Canada, we're seeing markets become more actionable and decisive. Economic and geopolitical uncertainty remain, but occupiers and investors are more willing to move forward where fundamentals are strong," Fieder stated. "The second half of 2026 is shaping up to be less about waiting for certainty and more about executing on opportunity." This characterization suggests that decision-making is increasingly driven by asset-specific merits rather than macro timing considerations.
Quality has emerged as the dominant differentiator in capital allocation patterns. High-quality and value-add properties are drawing the most investor and occupier attention, with capital gravitating toward assets featuring resilient income streams and strong operational performance. Interest rates and financing conditions remain key considerations for deployment, though the stabilization of credit markets appears to be enabling more decisive capital movement compared to earlier periods characterized by tighter lending conditions and higher refinancing risk.
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