Greater Toronto Area commercial real estate investment will continue to slow down following a sharp decline in the second quarter, says Altus Group.

The Altus finding contrasted with a Morguard report that says the outlook is positive for overall Canadian major market investment in the rest of 2023.

Continued high interest rates and a widening bid-ask gap between buyers and sellers will continue to weigh on the GTA market, said Altus, a Toronto-based commercial real estate analytics company.

GTA investment nosedived 27 per cent in the second quarter as rising interest rates and ongoing economic uncertainty continued to influence investor sentiment, said Altus.

Despite the overall slowdown, investors showed ongoing strong appetite for industrial real estate. The sector’s investment grew 36 per cent year-over-year to $3.39 billion.

However, industrial investors have become more risk-averse due to the rising interest rates, increased construction costs and more space on the market. Industrial availabilities rose a full percentage point to 2.3 per cent.