Cushman & Wakefield Canada Seniors Housing Report: Robust Demand, Tight Supply Set Stage for Record-Setting Investment in the Sector

TORONTO, 20 March, 2025 – Cushman & Wakefield has released its Canada Seniors Housing Overview, noting the sector’s post-pandemic resurgence against a backdrop of supply and new-construction constraints, which will set the stage for heightened institutional and private-equity investment in the sector.  

“We expect 2025 to be a record-setting year for seniors housing deal making in Canada, as investors position themselves to capitalize on the exceptional fundamentals and expected outperformance of the asset class over the next 20 years,” said Sean McCrorie, Vice Chairman, Seniors Housing & Healthcare at Cushman & Wakefield. “The sector will continue to gain favour with investors, as they rebalance portfolios by adding alternative real estate asset classes and reduce weighting of certain traditional real estate assets. What’s more, we are seeing an influx of U.S. investors seeking to benefit from future currency-related upside as the Canadian dollar strengthens.” 

The demand for seniors housing is predominantly needs driven, making the overall demand curve very well telegraphed over the coming decades. Canada’s senior population is growing rapidly, with the number of individuals aged 75+ expected to reach around 5.3 million in the next 10 years, an increase of 1.7 million people. That aging population creates strong demographic tailwinds that will drive demand for seniors housing.  

Despite the growing demand, Cushman & Wakefield’s report notes a dearth in seniors housing supply growth for at least the next five years. The supply of seniors housing units has been constrained, as developers grappled with a combination of rising costs, interest rate hikes, and the residual effects of the pandemic, which slowed the pace of new construction. Since peaking in 2017, construction starts have fallen to a recent low, with starts as a percentage of total inventory dropping below 1% in 2023 and 2024. Given the current development economics, the rate of obsolescence of older rental stock and the lead time associated with development, we foresee a multi-year slowdown in the rate of supply growth, with annual net supply growth not exceeding 2% until 2030. 

Meanwhile, seniors housing-industry fundamentals are on solid footing from the operators’ perspective, with the disruptions from the pandemic now largely in the past. Over the past 12 to 24 months, operating performance has improved significantly. Forecast demand growth is expected to overwhelm the existing inventory of rentals in the next few years, though, worsening the housing shortage felt in other parts of the market and resulting in tighter rental market conditions. As a result, occupancy and rental rate growth is expected to continue its current growth path.  

“Canada’s seniors housing market is positioned for robust growth, fueled by favourable demographic trends, a slowdown in supply growth and improving operating fundamentals,” said Heather Payne, Cushman & Wakefield Senior Vice President. “It also provides a massive development opportunity to house the growing seniors population, but it may take years for capital and construction to align to address this issue.”