Canada Market Update: Key Insights from the Toronto Real Estate Forum
By Elliot Higgins, CFA – Associate
Largo recently attended the Toronto Real Estate Forum, where we heard insights from institutional investors, politicians, and lenders. Insights from the Toronto Real Estate Forum highlight that while headwinds remain, structural reforms and shifting market dynamics are setting the stage for improved opportunities in 2026 and beyond.
CRE Outlook – Exiting a Trough
A key message from the Forum was that a slower couple of years may ultimately benefit Canada by forcing policymakers and businesses to address structural barriers to growth, competitiveness, and trade diversification both domestically and globally. Sentiment has evolved from last year’s repeated “cautious optimism” to a clearer sense that we are currently in a trough, with leading indicators signaling the start of a recovery in 2026. While 2025 saw major bifurcation across all asset classes in which well-located trophy assets transacted, the sentiment was that 2026 will commence a selective broadening of opportunities nationwide.
Tariffs – Not A Cause For Concern
Speakers downplayed tariffs as a primary risk to the Canadian outlook, noting recent U.S. Supreme Court pushback on tariff powers previously invoked under the International Emergency Economic Powers Act (IEEPA). While USMCA comes up for review in 2026, its framework continues to shelter much of the Canadian industry, and the effective tariff burden on Canadian exports remains approximately 4%-5%.
Trump Factor
Benjamin Tal and panelists noted that U.S. voters increasingly cite inflation and cost of living as top concerns, which constrains the political appetite for prolonged trade tensions. With Donald Trump’s approval rating at its lowest levels since his inauguration, there was a prevailing view that he has limited time and room to escalate economic pressure on Canada before facing further backlash domestically.
Canada’s Recovery From A Lost Decade
What many label a “lost decade” for Canada under Trudeau, speakers expressed optimism about fiscal stimulus under Mark Carney’s leadership, including his push to broaden international economic ties. Panelists highlighted strong prospects for the infrastructure investments and housing initiatives in the recent Canadian Budget. With inflation back in target range, the G7-lowest net debt-to-GDP ratio, and top employment/population growth among peers, Canada has the potential to improve its positioning among global markets.
The Cross-Border Opportunity
Panelists emphasized that Canada remains one of the few major markets where investors can still acquire institutional-quality assets at positive leverage, with going-in yields above current borrowing costs in select sectors and markets. At the same time, large managers continue to allocate heavily to the U.S.; for example, Blackstone’s North American strategy is reportedly concentrated roughly 95% outside of Canada, reflecting both self-imposed Canadian barriers and a lack of opportunity with just 8-10 investable markets.
Largo’s Cross-Border Positioning
With a renewed interest in cross-border opportunities, Largo has prioritized building relationships across borders, representing a correspondent network of 27 U.S. lenders. This network enables Canadian borrowers and owners to access a broader range of capital sources, pricing options, and financing structures critical for navigating today’s selective opportunity sets.
