Canada’s commercial real estate market currently presents more attractive investment opportunities than the U.S. and other global regions, according to a new report from Colliers. The firm highlights several key factors behind Canada’s growing appeal: faster population growth, a more favorable lending environment, and tighter supply conditions.
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“In times of global uncertainty, capital usually flows to the U.S. — but now, some of the chaos is coming from there,” said Adam Jacobs, head of research at Colliers, in an interview with Yahoo Finance Canada.
The report, aimed partly at foreign investors who traditionally default to U.S. markets, makes the case for Canada’s relative stability and growth potential — particularly when it comes to demographics. Drawing on Oxford Economics data, the report shows that Canada’s population has been expanding at a significantly faster rate than other developed economies, including the U.S. In 2022, Canada’s growth rate was double that of the U.S., and in 2023 and 2024, it was nearly triple. While immigration has eased in 2025, Colliers expects Canada to regain its demographic momentum by 2027.
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“Population growth drives demand in every segment of real estate — from apartments to retail to employment,” Jacobs said. “It’s not a fix-all, but it provides a powerful tailwind.”
This population-driven demand is especially visible in the office and retail sectors. For investors in Canadian REITs tied to these asset classes, the upside is seen in higher occupancy rates and rising rents, reflecting strong demographic fundamentals.
Canada vs. the U.S.: A Shifting Dynamic
Historically seen as the ultimate safe haven, the U.S. is now being reassessed by investors, Jacobs argues. While Canada may not match its neighbor in market size or liquidity, its image as a more stable and predictable environment is gaining ground.
One of the clearest contrasts between the two markets is in interest rates. Canadian 10-year bond yields are currently more than one percentage point below those in the U.S. — a rare and significant divergence for a highly leveraged industry like real estate.
“That one percent difference has a huge impact on financing and development,” said Jacobs. “It’s a friendlier landscape for refinancing and new projects here — even if municipal approval remains a challenge.”
Supply also plays a major role. Despite the perception that Canadian cities are in constant construction mode, the market remains less saturated than in the U.S. The report notes that the U.S. has 16.5 square feet of office space per capita, compared to 12.6 in Canada, and 23.5 square feet of retail space per capita, versus Canada’s 16.8.
This comparative scarcity benefits current asset holders by limiting new competition. “If you own an existing property in Canada, it’s likely to retain or grow in value, because you’re not constantly battling against a flood of new supply,” Jacobs noted.
Supporting this view, CBRE’s Retail Rent Survey from late 2024 found record-low vacancy rates in Canada and steady rental growth, despite broader economic headwinds — clear indicators that demand is outpacing development.
A More Resilient Long-Term Bet
Beyond short-term trends, Jacobs points to Canada’s relative resilience in the office sector. While vacancy rates have risen, Canadian downtowns are performing significantly better than many U.S. counterparts, which have been hit harder by the shift to remote work.
“People are pessimistic about offices, but Canada still has some of the healthiest downtown office markets globally,” he said.
Canada’s commercial real estate market is also less vulnerable to extreme fluctuations. Thanks to slower-paced development and the dominance of large institutional players like pension funds, the market experiences fewer distress sales and maintains a steadier trajectory.
In short, while the U.S. has long been the go-to destination for global real estate capital, Canada’s growing population, tighter supply, lower interest rates, and market stability are making it an increasingly compelling alternative for long-term investors.
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