Betting on the Bottom: Why Canada’s Real Estate Market Needs Policy, Patience, and Bold Buyers

The closing panel at the 2025 Toronto Real Estate Forum offered something rare in today’s fractured real estate landscape: clarity. Not quite optimism, but clarity — about where we are, where capital is flowing, and what will determine whether Canada participates in the next global upcycle or watches it from the sidelines.

Across Blackstone, Kingsett, Choice, Cadillac Fairview, and Oxford, the message was consistent: the market has stabilized, but it hasn’t recovered. Beneath that sobering assessment, however, lies conviction about where the smart money is heading.

“We’re Bumping Along the Bottom” — But It’s a Firm Bottom

Blackstone’s Janice Lin set the tone: “We thought 2025 would be the recovery year. It wasn’t. We’re bumping along the bottom.”

Borrowing costs have eased, but not enough to spark a rebound. Transaction activity is returning, but nowhere near 2019 levels. And 2025 marks the largest refinancing year since the pandemic — a test not all borrowers will pass.

Capital markets are healing, deal sizes are growing, and private credit is stepping in where equity once dominated. Yet Canada continues to lose investment to markets offering clearer rules, faster approvals, and better risk‑adjusted returns.

Where Capital Is Flowing: Retail, Data Centres, Hotels, and Land

If there was one unmistakable theme, it was this: the next cycle’s winners are buying now.

• Blackstone is leaning into retail, data centres, luxury hospitality, and high‑quality downtown office trading below replacement cost.
• Kingsett’s Rob Kumer urged: “Buy land. It’s hyper‑scary today… but in 2030 and 2031, it will look brilliant.”
• Choice Properties’ Rael Diamond echoed the land call and added multifamily to the must‑buy list, citing immigration rebounds and cap rates unlikely to last.
• Oxford’s Eric Plesman provided a global lens: international capital is once again studying high‑quality office, but Canada’s regulatory drag makes us uncompetitive in data centres — a trillion‑dollar missed opportunity.

Liquidity Is Back — But Foreign Capital Isn’t

The freeze is thawing. Eight months ago, a property might have attracted a single bid. Now, there are several.

But almost all the bidders are Canadian private capital — family offices and entrepreneurial investors moving aggressively into deep‑value opportunities. Foreign investors remain largely absent.

Cadillac Fairview’s Sal Iacono put it bluntly: “Taxes, regulations, low productivity — Canada is full of impediments for global capital.”

The Social Fabric: Real Estate’s New Risk Factor

Kingsett’s Kumer raised a sobering alarm: “We own buildings in communities that are being torn apart at the seams.”

Antisemitism, carjackings, burglaries, and unrest are not just headlines — they are operational realities affecting tenants, employees, and asset values.

Lin countered with San Francisco’s turnaround under new leadership: safety improved, police presence increased, retailers reopened, and residents returned. Her message was clear: political leadership shapes real estate outcomes more than the industry admits.

Multifamily: The Opportunity Depends on Government

Every panellist agreed: multifamily is the most compelling medium‑term play. But two things block progress: interest costs and permitting timelines.

Governments have launched promising measures — HST/GST relief, CMHC financing, Carney’s infrastructure‑first housing strategy — but panelists were clear it’s not enough. Municipalities no longer build infrastructure at scale. Transit, water systems, and planning departments are not equipped for Canada’s population targets.

As Iacono put it: “If permitting and infrastructure aren’t fixed, nothing else matters.”

Focus on What You Can Control

The industry cannot control interest rates, bond yields, cap rates, geopolitics, or foreign investment flows. But it can control operating fundamentals, leasing execution, tenant relationships, and portfolio quality.

During COVID, Cadillac Fairview’s ability to maintain tenant relationships was the backbone of its resilience. That message — focus on what you can control — resonated across the room.Healing Has Started — But Booming Is Still a Way Off

The panel concluded with cautious optimism: capital markets are improving, valuations are stabilizing, industrial NOI remains strong, retail is resilient, multifamily will be a major opportunity eventually, and land at today’s prices may be the trade of the decade.

Kumer summed it up: “The inflection is behind us.”

Conclusion: A Market Repricing, Not Retreating

This year’s panel revealed a market that has endured enormous shocks — a pandemic, inflation, soaring cap rates, outflows of global capital — and yet remains remarkably resilient.

If 2024–25 marked the cyclical bottom, then the late 2020s may be defined by those bold enough to buy when others hesitated: land at generational lows, data centres and retail with pricing power, office towers trading below replacement cost, hotels with surging NOI, and multifamily assets waiting for policy alignment.

The final words of the session captured the moment perfectly: “We should all be proud of how our industry handled the last cycle. Now, we need to position ourselves for the next one.”

Tune in to Brian Crombie, host of The Brian Crombie Hour, at www.briancrombie.com or on all major podcast platforms.

Photo: Sukh Bhaura, CCIM – REMAX President Realty