GTA Multifamily Q1 2026 Report

Market Overview

The first quarter of 2026 continued the recovery trajectory that began in late 2024. Transaction volume across the GTA multifamily market showed meaningful strength, with buyer confidence supported by a more accommodative rate environment and improving rental fundamentals.

Key Highlights

Bank of Canada maintained the overnight rate at 2.25%, providing stability after the aggressive cutting cycle of 2024-2025

5-Year GoC yields trading at 3.18%, down from the 4%+ levels seen in late 2023

CMB 5-Year spreads stable at ~15 bps, supporting attractive CMHC financing terms

Cap rate compression resumed in primary markets, particularly for stabilized assets in the 30-100 unit range

Institutional capital returning to the market, with several large portfolio mandates in circulation

Transaction Activity

Q1 2026 saw a notable increase in both the number and quality of transactions closing across Ontario. Private capital continued to dominate the sub-$20M segment, while institutional buyers showed renewed interest in larger portfolios.

The competitive tension we are seeing in marketed processes has increased meaningfully compared to the same period last year, reflecting improved buyer conviction around the rate outlook and rental growth trajectory.

Rate Environment

The current rate environment remains constructive for multifamily investors:

Conventional financing: 5-Year fixed rates in the 4.25-4.75% range

CMHC insured: 5-Year CMB at 3.33%, representing significant savings over conventional

Floating rate: Prime at 4.45%, still elevated but expected to compress further if BoC continues easing

Outlook

We expect Q2 and Q3 2026 to be the most active trading periods in the past three years. The combination of lower financing costs, resilient rental growth, and pent-up supply of capital seeking deployment creates a favourable environment for both buyers and sellers.

For sellers, the current market offers an opportunity to achieve pricing that reflects the improving fundamentals rather than the distressed conditions of 2023-2024. For buyers, the window to acquire before cap rates fully compress is narrowing.

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