Investor confidence in Canada’s multi-suite residential rental properties remained strong in the second quarter, with demand continuing to outpace supply, says Morguard in a new report.

Industrial and office asset classes also showed resiliency despite global trade tensions and economic uncertainty, according to according to the company’s 2025 Economic Outlook and Market Fundamentals Second Quarter Update.

“Canada’s real estate market continues to be supported by solid fundamentals that foster long-term optimism and growth,” said Angela Sahi, president and chief operating officer of Morguard. “Even amid market volatility, investor interest in high-quality industrial and office properties remains strong.”

Multi-suite residential rental transaction volume rose to $812 million in the quarter, a 39.4% increase from the previous quarter. While rental demand is expected to moderate due to lower immigration, fewer temporary workers and more first-time homebuyer activity, asking rents are projected to climb into next year as new supply comes online.

Industrial properties, particularly logistics and warehouse assets, remained attractive, with about half of those sold purchased by users seeking to avoid high lease rates. Office-leasing conditions were stable, with trophy assets in core locations driving tenant demand. Retail investment moderated after a strong start to the year but remained brisk compared with recent trends.

Canada’s economy cooled in the quarter as trade disruptions and tariffs pressured job creation, consumer spending and investment, although core inflation stayed under control.

“While global economic conditions continue to evolve, the Canadian real estate market is showing encouraging signs of stability,” said Keith Reading, senior director, research at Morguard. “With balanced fundamentals and continued investor interest in core sectors, the outlook for the second half of 2025 remains positive.”