Canada’s commercial real estate market is showing increasing signs of stability heading into the second half of 2026, according to Avison Young’s latest mid-year outlook, although new U.S. tariffs could create fresh challenges for the industry.
The report indicates that market activity continues to build momentum across the country, even as optimism has become more measured compared with the firm’s previous outlook released in December.
The findings are based on an online survey conducted between June 3 and June 16, involving 220 client-facing Avison Young professionals, including brokers, sales representatives, and specialists in project management, property valuation, and property management.
Nearly half of respondents expect commercial real estate activity to increase during the remainder of 2026, compared with 64% who expressed that view in December. At the same time, a similar proportion thinks that market conditions will be stable for the year.
The shift, said Avison Young, indicates a move from general optimism to a more balanced perspective, with both investors and occupiers more ready to persevere despite ongoing economic uncertainty.
Mark Fieder, Principal and President of Avison Young, said stronger market fundamentals are encouraging businesses and investors to act rather than waiting for perfect economic conditions.
The company believes the second half of 2026 will be defined less by uncertainty and more by organizations taking advantage of opportunities where market conditions support investment.
However, the report notes that the survey was completed before U.S. President Donald Trump announced new 50% tariffs on a range of Canadian products earlier this week. Those measures are expected to take effect within 30 days, making their potential impact on commercial real estate difficult to assess at the time the survey was conducted.
Even so, Avison Young found that concerns surrounding costs and tariffs have eased compared with a year earlier. They are now the second most common cause of project delays, with 23% of respondents citing this as a reason, down from 34% in the company’s 2025 mid-year report.
Instead, project-specific risk has emerged as the primary contributor to project delays, accounting for about 25% of delayed developments.
The report says this is developers adjusting to the wider financial impact of economic and geopolitical uncertainty, and focusing more on the management of individual project risks.
Avison Young also notes the unevenness of the recovery across Canada.
Market sentiment has stabilized in Toronto, Ottawa, Calgary and Edmonton while respondents in Vancouver and Montreal expressed stronger confidence about market conditions and future activity.
Overall, the firm says Canada’s commercial real estate market is entering a more stable phase, though changing trade policies and geopolitical developments will continue to influence investment decisions in the months ahead.
