Canada’s multi-suite residential rental market will experience a significant imbalance in 2024 as demand outpaces the available supply of new and existing properties, says a new Morguard report.

“As interest rates and inflation rates gradually decline, there is an anticipation of pent-up investment demand within the property sector,” said Keith Reading, Morguard’s senior director of research, in a news release. “Multi-suite residential rental properties are expected to be particularly attractive to investors given their healthy fundamentals and positive rent-growth outlook.”

Demand for multi-residential rental units has consistently exceeded supply due to increased immigration and stronger than expected job growth, says the report. In addition, elevated interest rates and inflation are making it harder for rental households to purchase homes.

Investors have continued to show how confidence in the multi-residential market in 2023 amid the demand-supply imbalance and heightened economic uncertainty.

The industrial real estate market is also poised for continued strength as supply remains constrained following record-setting performance in recent years. Toront-based Morguard expects the retail market to stabilize following a “period of modest progression.”

A report from PwC and the Urban Land Institute tagged the industrial and multi-family sectors as Canadian commercial real estate’s best bets in 2024.