What’s Next for Canada’s Real Estate in 2025? Finding New Opportunities in a Recovering MarketPosted on July 25, 2025

This shift is creating opportunities not only in housing but also in broader commercial and industrial real estate. As demand for office and retail space in urban areas, which had declined significantly during COVID-19, begins to recover, previously underutilized properties are being reimagined as customer service hubs, light logistics centers, or hybrid workspaces. It has created new strategic opportunities for international companies aiming to strengthen their local presence and tap into the domestic market.

Another key point to note is the ongoing recovery in Canadian consumer spending. As consumption continues to rebound from the pandemic-induced slump, it is having a positive impact on service sectors and offline-focused industries. This trend further enhances the expansion potential of sectors linked to real estate infrastructure, such as IT services, hospitality and leisure, and R&D facilities. Therefore, rather than viewing real estate investment as a standalone objective, it is more strategic to approach it as part of a broader plan to establish a long-term business presence.

For international companies, now is a highly favorable time to establish R&D centers, logistics hubs, or local branches for customer engagement, given the current environment of low interest rates and price stability. The Bank of Canada has maintained its policy rate at 2.75%, and inflation remains stable. This translates into lower asset acquisition costs, reducing the financial burden of initial capital investments.

Notably, provincial governments such as Ontario and British Columbia are introducing incentives aligned with their strategies to foster startup hubs and innovation districts, particularly in commercial real estate development. Major Canadian cities are actively advancing urban planning policies that emphasize ESG principles to support sustainable urban development. Ontario, for example, offers the Ontario Innovation Tax Credit (OITC), which provides tax relief for R&D-driven business activities. This reflects growing policy interest in green design and energy-efficient architecture.

This environment provides a strong foundation for companies when considering long-term investments such as AI-based design or the development of smart city facilities. If initial investments are supported by government grants or tax incentives, it can also help formulate a more practical market entry strategy. In particular, if a company enters a region aligned with a province’s designated strategic industry, it may benefit from tax credits, rent subsidies, simplified construction permitting, and other advantages. These incentives could provide significant opportunities for businesses looking to expand into the Canadian market in the future. As such, the Canadian real estate market in 2025 with signs of recovery is offering strategic entry points centered on industrial and infrastructure development. Now is the time for companies to consider not just securing investment locations, but also planning for long-term expansion.