The Future of Seniors Housing in Canada: Insights from Cushman & Wakefield

TORONTO, 20 March 2025 – The landscape of seniors housing in Canada is undergoing a significant transformation, as revealed in Cushman & Wakefield’s recently published Canada Seniors Housing Overview. The report highlights a post-pandemic resurgence in the sector, driven by demographic shifts, evolving market dynamics, and substantial investment opportunities. In this article, we’ll explore the key findings from the report and discuss the factors shaping the future of seniors housing in Canada.

A Booming Market for Seniors Housing

As Canada’s senior population steadily increases, the demand for appropriate housing solutions is expected to soar. According to Cushman & Wakefield, the number of individuals aged 75 and over is anticipated to reach approximately 5.3 million within the next decade, representing a remarkable jump of 1.7 million people. This swift demographic change creates immense tailwinds for the seniors housing market, introducing a pressing need for both supportive environments and independent living options.

Investment Growth and Strategizing for the Future

Sean McCrorie, Vice Chairman of Seniors Housing & Healthcare at Cushman & Wakefield, expressed bullish sentiments regarding the investment landscape. “We expect 2025 to be a record-setting year for seniors housing deal-making in Canada," he stated. This optimism stems from anticipated outperformance in the asset class over the next two decades, providing a compelling proposition for both institutional and private-equity investors. As traditional real estate assets face reevaluation, many are looking to diversify portfolios by incorporating alternative real estate options—seniors housing being a prime candidate.

Moreover, the report notes a growing interest from U.S. investors who are keen on capitalizing on the potential strength of the Canadian dollar. This influx of capital not only points to confidence in Canadian real estate but also highlights the global recognition of the sector’s long-term viability.

Supply Constraints Amid Rising Demand

Despite the encouraging outlook, the report raises concerns about the supply of seniors housing units. Cushman & Wakefield notes that construction starts have significantly decreased since peaking in 2017. Current trends indicate that new construction has dropped to less than 1% of total inventory in 2023 and 2024. The combination of rising costs, interest rate hikes, and ongoing repercussions from the pandemic have constrained developers, exacerbating supply shortages.

With older rental stocks becoming obsolete and the lengthy lead times associated with new developments, experts predict that supply growth will be sluggish. Annual net supply growth is not expected to surpass 2% until 2030, creating additional pressure on an already strained market.

Improving Fundamentals and Operating Performance

Despite the supply constraints, operators in the seniors housing market are witnessing a rebound in performance. The disruptions caused by the pandemic appear to be largely behind them, and occupancy rates have begun to stabilize at improved levels. As demand continues to rise, the existing inventory is likely to be overwhelmed, creating tighter rental market conditions across the board.

Heather Payne, Senior Vice President at Cushman & Wakefield, remarked on the current state of the market: “Canada’s seniors housing market is positioned for robust growth, fueled by favorable demographic trends, a slowdown in supply growth, and improving operating fundamentals.” The combination of these factors presents a unique development opportunity to better accommodate the growing senior population.

Challenges Ahead: Aligning Capital and Construction

While the outlook for growth in seniors housing is encouraging, challenges remain. As highlighted in the report, it may take several years for the volume of investment to align with construction timelines to effectively address the housing needs of the aging population. Regulatory hurdles, zoning laws, and development costs will need consideration if the sector is to keep pace with demand.

Conclusion: A Bright Future for Seniors Housing

In conclusion, the insights from Cushman & Wakefield paint a promising yet complex picture for the seniors housing sector in Canada. With a rapidly aging population, heightened investment interest, and improving operational conditions, the market holds considerable potential. However, overcoming supply constraints and aligning investment with timely construction will be critical to ensure that the needs of seniors continue to be met in the years to come.

As 2025 approaches, stakeholders in the seniors housing sector will need to navigate these challenges with foresight and strategic planning, positioning themselves to harness the tremendous opportunities that lie ahead. The next decade will be pivotal, especially as Canada strives to create a supportive environment for its aging population.