TORONTO, September 25, 2024 – Cushman & Wakefield announced today the release of its Canada Seniors Housing Operating Performance report, which forecasts the sector’s surging growth across the country for the next two decades.
Of the 17 markets Cushman & Wakefield surveyed, private pay seniors housing occupancy increased by 4 percent over the past year to 88% and is expected to surpass the pre-pandemic level, 92 percent, by the end of 2025. Since Q2 2021, occupancy is up by over 8 percent, with leasing velocity increasing in most markets. Positive net absorption has been posted in 16 of the 17 markets surveyed since 2021.
“We have increasing confidence that favourable tailwinds will continue to fuel an upswing in the private-pay Canada seniors housing sector, accelerating it beyond recovery-mode into growth territory for an expected strong operating environment,” said Sean McCrorie, Executive Vice President and Practice Leader for Cushman & Wakefield’s Seniors Housing and Healthcare Valuation & Advisory Services (VAS) group. “Compelling supply and demand fundamentals for seniors housing are underpinned by structural shifts in demographics that will drive seniors housing user demand over the next two decades. Despite the well telegraphed increase in demand, seniors housing development activity in Canada has slowed to a new cyclical low, as rising construction costs and interest rates have crowded out investment.”
With Canada’s over-80 population expected to grow at a Compound Annual Growth Rate (CAGR) of 4.8 percent between 2025 and 2042, a supply and demand imbalance is expected to accelerate. Over the next decade, Cushman & Wakefield’s research projects demand for approximately 200,000 new seniors housing suites to maintain market equilibrium. In the past decade, fewer than 73,000 suites were built. And while investors’ and developers’ cost of capital is trending back to its historical mean as the cost of borrowing pulls back from the highest levels in over a decade, construction prices continue to escalate.
“Projected demand-growth is expected to overwhelm the existing inventory of rentals in the next few years, worsening the housing shortage felt in other parts of the market and creating a significant need for new seniors housing developments,” said Heather Payne, Senior Vice President for Cushman & Wakefield’s Seniors Housing and Healthcare VAS group. “The current rate of construction starts is not keeping pace with the rate of required replacement. We think it is unlikely that the rate of supply growth will keep pace with demand, leading to a tighter market.”
Cushman & Wakefield Canada Valuation & Advisory Services Releases Seniors Housing Operating Performance Report
Bailey Webb • 9/25/2024
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenue of $9.5 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), sustainability and more. For additional information, visit www.cushmanwakefield.com.
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenue of $9.5 billion across its core services of property, facilities and project management, leasing, capital markets, and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), sustainability and more. For additional information, visit www.cushmanwakefield.com.