- What Occupancy levels and rents are on the rise in Canada’s seniors housing market, Cushman & Wakefield said in a report
- Why An aging population is putting pressure on demand with little new inventory coming to market
- What next Occupancy is expected to surpass pre-pandemic levels by the end of 2025
Seniors housing market metrics are “trending in the right direction” in Canada, Cushman & Wakefield said in a new report.
Across the 17 major markets surveyed for the report, occupancy is up four points year over year to 88% – a notable increase from the low of 78% seen in Q2 2021. Cushman is projecting occupancy will surpass the pre-pandemic level of 92% by the end of next year and will hit 95% by 2027.
“The compelling supply and demand fundamentals for private-pay seniors housing rental communities in Canada are underpinned by structural shifts in population demographics that will drive seniors housing user demand over the next 20 years,” Cushman said.
Despite this growing demand, construction of new seniors housing has remained limited amidst high construction costs and prohibitive interest rates. As such, the market is expected to tighten even further, “worsening the housing shortage felt in other parts of the market.”
There are some exceptions to the inventory drought, such as Ontario’s Durham region, where occupancy levels declined an additional six points from the national low in 2021 due to an influx in supply in recent years – 33% since 2019. Even still, occupancy rates in the region are expected to improve over the next two years.
“While Durham has seen the most significant surge in late-cycle new supply, other markets like York, Halton and Calgary will also have multiple new communities open during the balance of 2024 and 2025,” Cushman said. “In the context of the growing demand, we expect these new projects will be absorbed in the normal course.”
As demand has grown, so too have rents, which have increased 3% to 5% year over year in 2024, on average. A strong rent growth profile will become “a hallmark” of seniors housing in the immediate future, the brokerage said.
In Vancouver, the country’s priciest city, the median rent is $7,896, ranging from $5,888 for a studio to $9,958 for a two-bedroom. In Toronto the median rent is lower, at $6,471, but the lowest median rents were found in Québec, at $2,282 for Montréal, $2,354 for Québec City and $2,233 for Gatineau.
