TORONTO, February 5, 2025 – Cushman & Wakefield’s Seniors Housing Market Overview report finds that Canada’s seniors housing sector is poised for a record year in 2026, driven by accelerating demand, constrained supply, and visible and sustained income growth across the industry.
Having now largely recovered from pandemic-related disruption, fundamentals suggest seniors housing is well-positioned to outperform other commercial real estate asset classes as structural tailwinds strengthen in the year ahead. Capital markets activity reflects this improved outlook, with investors increasingly allocating capital to the sector in recognition of its long-term growth potential.
Nationally, year-end 2025 occupancy rose by roughly 3.5 percentage points over the prior year to reach 93% and is on pace to hit 95% occupancy by the end of 2026.
While the number of Canadians aged 75 and older is accelerating and driving demand for seniors housing residences, the supply is not keeping pace. For the third consecutive year, construction starts remained below 1% of total inventory, which is not enough to offset the natural attrition of obsolete product, let alone meet the growing needs of an expanding seniors population, according to the Cushman & Wakefield report.
“The prevailing dynamic across Canada’s seniors housing industry is that demand is accelerating while supply remains constrained,” said Sean McCrorie, Vice Chair and Practice Leader, Seniors Housing and Healthcare practice group. “This translates directly into improved operating performance across the sector, where occupancy levels are rising and rental rates continue to trend upward.”
The strengthening fundamentals and positive outlook are being reflected in capital markets activity. Over $2.7 billion in transaction volume occurred across Canada’s seniors housing industry in 2025. Notably, approximately 70% of capital markets transactions involved a public company buyer, underscoring the strong performance of these companies and their continued access to capital in the current environment.
Moreover, a supportive debt market and surging investment demand—bolstered by high-quality inventory and robust operating fundamentals—have driven recent cap rate compression and signals a favorable outlook for the year ahead, the Cushman report finds.
“There is significant momentum from both Canadian and U.S. investors looking to capitalize on the seniors housing and long-term care sectors,” added McCrorie. “With new entrants joining established firms in deploying capital, we expect to see even greater liquidity and deal flow across this active market. As a result, the sector is poised for record-setting transaction volume in 2026.”
While new development is at all-time lows, this is likely to change in 2026 due to improved market conditions and sustained demand growth which are creating the economic incentives needed to draw developers off the sidelines and initiate new projects. Even with new developments starting this year, the impact on supply is not expected to materialize until 2029/30.
“Fueled by the sheer scale of opportunity that lies ahead, we expect a new development cycle will kick off later this year,” said Heather Payne, Cushman & Wakefield Senior Vice President, Seniors Housing and Healthcare. “We estimate the market requires nearly 200,000 new rental units over the next decade to remain balanced. As development lead times mean the impact won't be immediate, there will be a prolonged period of strengthened market fundamentals driving rent growth and occupancy for existing residences.”