Investors hesitant to jump into the United States amid economic uncertainty are taking a look further north, as Canada currently offers better opportunities in commercial real estate, according to a Colliers report.
“Normally, when the world looks scary, money runs to the U.S. — but right now, they’re creating some of the chaos themselves,” Adam Jacobs, Colliers’ head of research, said in an interview with Yahoo Finance Canada.
Canada’s population growth, which has consistently outpaced other developed economies, is a primary reason the country deserves more attention, the report said. The population grew at twice the U.S. rate in 2022 and tripled its rate in 2023 and 2024, according to Oxford Economics data. Slowing immigration this year is expected to give way to growth again in 2027.
Population growth drives many key indicators impacting real estate, including housing, retail spending and labor, according to Jacobs. Office and retail in particular benefit from increases in population and spending.
The United States remains unmatched in size and liquidity, but its perception of stability may be shifting, Jacobs noted.
A notable area of divergence between the two countries is interest rates. Canada’s 10-year bond yields are more than a point below U.S. levels. While 1% may seem minimal in some contexts, in real estate, it is significant, making The Great White North more accommodating for development and refinancing. Municipal approvals, however, remain a bottleneck, said Jacobs.
In addition, Canadian markets are far less saturated than those in the United States. The U.S. has 16.5 square feet of office space per capita, compared with 12.6 square feet in Canada and 23.5 square feet of retail space to 16.8%, North of the border. This scarcity protects assets from being undercut by new developments, which Jacobs said is a common problem in the US.
Canada’s office sector has remained resilient despite climbing vacancy, and the country is less prone to dramatic swings than the US, stability that translates into superior returns. Canada’s commercial property price index has remained mostly positive since 2022, while American values have declined, according to Colliers. Canada has outperformed other G7 nations as well, along with Singapore and Hong Kong.
Finally, Jacobs noted that The Great White North has a more favorable federal financial position with a lower debt-to-GDP ratio that offers greater policy flexibility.
“It’s not often presented this way, but there’s a real case for Canada as the steadier option,” Jacobs said.
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