Canadian real estate market in transition: reinvention and cross-industry partnerships define 2026 outlook

PwC Canada's ETRE report highlights a sector reshaping itself amid shifting capital, policy momentum, and new growth domains

• Amidst the housing affordability crisis, new ideas and innovations emerge as the market shifts from condos to purpose-built rental.
• Real estate's intersection with energy, technology, and healthcare is reshaping the sector, as partnerships across these industries unlock new sources of value and drive the next wave of growth
• Canadian executives rank Calgary as the city with the strongest real estate prospects for 2026, followed by Toronto and Edmonton

TORONTO, Nov. 12, 2025 /CNW/ - PwC Canada and the Urban Land Institute's Emerging Trends in Real Estate (ETRE) 2026 Canadian report reveals a market in transition as companies reinvent business models to capture new sources of growth. While affordability and housing supply dominate headlines, the report points to growth in purpose-built rental, grocery anchored retail and seniors' housing, fueled by new sources of capital and faster cross industry partnerships.

"Canadian real estate is at a pivotal moment--policy momentum is building, and the sector's ability to collaborate across industries is opening doors to new opportunities," said Fred Cassano, Partner, National Real Estate Leader, PwC Canada. "Addressing the construction shortage is essential, as its impact ripples across every asset class, from housing to retail and industrial. By embracing new approaches and partnerships, we have a tremendous opportunity to build the spaces our communities need and unlock growth throughout the market."

The report underscores how traditional equity and bank debt have slowed, creating opportunities for private capital (private REITs, family offices, and private debt) to fill in the gaps.

"With traditional capital channels constrained, private capital and private debt are decisively filling the void. This shift is fuelling innovative business models and unlocking value in key growth areas like student housing, medical offices and other alternative sectors," added Cassano. 

"In Toronto and Vancouver, the condo reset is steering capital to rental, including asset classes like student housing. Leaders in 2026 will be companies who partner widely, adopt technology confidently and get creative in how they structure and finance deals," said Richard Joy, Executive Director, ULI Toronto, "But Calgary remains a standout, with policy agility and supply delivery driving momentum."

Key trends in Canadian real estate for 2026:

1. Purpose-built rental scales up: Developers are pivoting decisively from condos to rental, leveraging CMHC programs, municipal incentives and new financing structures. Rents have softened in some urban areas as supply arrives, but mid-market and family sized units remain scarce and in demand.
2. Modern methods of new home construction rises if financing and policy adapts: Prefabricated and modular methods are central to accelerating supply under initiatives like Build Canada Homes. New models like equipment and inventory finance, bulk procurement/first-buyer programs and streamlined codes are critical to scale beyond pilots.
3. Capital stack reinvention: With traditional equity and bank debt constrained, private capital (private REITs, family offices, private debt) is filling gaps. Creative structures like performance-based land pricing and vendor take-backs are bridging bid-ask spreads.
4. AI moves from pilots to performance: Firms are realizing measurable gains in leasing, pricing, maintenance and security. Quebec's Law 25 has set a high bar for data governance, while agent AI emerges as the next frontier, compressing transaction timelines and demanding stronger privacy and compliance guardrails.
5. Resilient and emerging asset classes: Grocery anchored/open-air retail continues to outperform; seniors' housing and medical office gain momentum as demographics and policy measures shift care delivery; self-storage benefits from densification; industrial remains solid with a tilt to small bay assets; data centre opportunities persist where power and land can be secured via partnerships.

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About PwC Canada

At PwC Canada, our purpose is to build trust in society and solve important problems. More than 7,000 partners and staff in offices across the country are committed to delivering quality in assurance, tax, consulting and deals services. PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see  www.pwc.com/structure for further details. Find out more by visiting us at: http://www.pwc.com/ca

About ULI

The Urban Land Institute (www.uli.org) is a non-profit education and research institute supported by its members. The mission of the Urban Land Institute is to shape the future of the built environment for transformative impact in communities worldwide. ULI is a global network of professionals in every sector of real estate development and land use, from private enterprise to public service. Established in 1936, the Institute has more than 45,000 members representing all aspects of land use and development disciplines. The Urban Land Institute is an active and growing organization in Canada. ULI Toronto is the 2^nd largest District Council in the ULI network with over 2,200 members in the Toronto region, and Canada's first ULI District Council (toronto.uli.org) established in 2005.

SOURCE PwC Management Services LP

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