Canada’s seniors housing sector is poised for a record year in 2026, driven by accelerating demand, constrained supply and sustained income growth, according to Cushman & Wakefield’s latest Seniors Housing Market Overview report.

As a result, the company anticipates that a long-awaited new-construction development cycle will begin this year.

Having largely recovered from pandemic-related disruption, the sector’s fundamentals suggest it is well-positioned to outperform other commercial real estate asset classes as structural tailwinds strengthen in the year ahead. Capital-markets activity reflects the improved outlook, with investors allocating increasing amounts of capital to seniors housing in recognition of its long-term growth potential.

National occupancy reached 93% at year-end 2025, up roughly 3.5 percentage points from the previous year, and is on pace to hit 95% by the end of 2026.

While the number of Canadians aged 75 and older continues to rise, driving demand for seniors housing residences, new supply is not keeping pace. For the third-consecutive year, construction starts remained below 1% of total inventory — insufficient to offset the natural attrition of obsolete properties, let alone meet the needs of a growing seniors population.

“The prevailing dynamic across Canada’s seniors housing industry is that demand is accelerating while supply remains constrained,” said Sean McCrorie, the firm’s vice-chair and seniors housing and healthcare practice group leader. “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 are also evident in capital markets activity. More than $2.7 billion in transaction volume was recorded across Canada’s seniors housing industry in 2025. Approximately 70% of those transactions involved a public company buyer, underscoring the strong performance of publicly traded firms and their continued access to capital.

A supportive debt market and rising investment demand — supported by high-quality inventory and robust operating fundamentals — have led to recent cap rate compression and signal a favourable outlook for the year ahead, the 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.”

Although new development is at historic lows, the report suggests this could change in 2026 as improved market conditions and sustained demand growth create the economic incentives needed to bring developers back to the market. Even so, any new projects launched this year are not expected to affect supply meaningfully until 2029 or 2030.

“Fuelled by the sheer scale of opportunity that lies ahead, we expect a new development cycle will kick off later this year,” said Heather Payne, C&W’s senior vice-president of seniors housing and healthcare. “We estimate the market requires nearly 200,000 new rental units over the next decade to remain balanced.”

Since development lead times prevent an immediate increase, there will be a prolonged period of strengthened market fundamentals driving rent growth and occupancy for existing residences, she added.

Photo: Courtesy of Cushman & Wakefield