Finding a home in a seniors housing complex in Canada is becoming more difficult as demand from an aging population increases and construction on new units slows.
In the second quarter, the occupancy rate for the national seniors housing market rose to 91.5%, a significant increase from its pandemic low of about 78% in 2021, according to Cushman & Wakefield’s Seniors Housing Operating Performance report.
As a result, those seeking to rent seniors housing might be in for a challenge. “This widening gap between supply and demand is expected to put additional pressure on available inventory,” Cushman & Wakefield Vice Chair Sean McCrorie said in the report.
Moreover, McCrorie said he expects “2025 to be a record year for seniors housing dealmaking in Canada.” He also serves as Canadian seniors housing and healthcare practice group leader for Cushman & Wakefield’s valuation and advisory group in Toronto.
Major Canadian seniors housing providers, such as Chartwell Retirement Residences, a company with roughly 200 retirement residents and 25,000 residents, and Sienna Senior Living, which has roughly 14,500 people in 94 properties, could benefit from the demand and demographic swings. In fact, the number of Canadians over the age of 80 is slated to grow at an annual rate of 4.8% through 2042.
As a result, Canada will need about 200,000 new seniors housing units to be built over the next decade, a far greater pace than the 73,000 that were built in the past 10 years, according to Cushman & Wakefield.
Canada’s highest average rent for a private-pay seniors housing unit was in Toronto, at $5,900 per month, while Vancouver had an average cost of $5,500, Ottawa had an average cost of $4,800, Calgary was $4,300, Edmonton was $4,100, Montreal was $3,900, and Quebec City had an average cost of $3,600.
Availability expected to reduce further
All but one of the 17 Canadian seniors housing markets surveyed in the report had lower vacancy rates in the second quarter, according to Cushman, with Durham, east of Toronto, being the lone outlier. Durham saw a significant increase in its seniors housing supply with eight new properties containing 1,400 units added to the market since 2021. That pushed the market's overall occupancy rate down to 79.4%, the report said.
Victoria, British Columbia, had the highest seniors housing occupancy rate in Canada with 96.4% of units filled, followed closely by Vancouver at 95.6%, Cushman said in the report.
The real estate services firm said some of the lower occupancy numbers were seen in Hamilton, Ontario, where the occupancy rate was 85%, and the Okanagan region of British Columbia, where the rate was 88% in the second quarter.
Looking forward, the Cushman report expects continued declines in vacancy and higher rents due to limited construction that will add on to the 3% to 6% year-over-year rent increases seen so far this year for seniors housing compared to 2024.
Labour shortages could also prove a challenge for operators, according to the report.
“With demand for care services continuing to grow alongside Canada’s aging population, the availability of care-sector related workers is increasingly important,” said Heather Payne, senior vice president at Cushman & Wakefield, in a statement.