{"id":49433,"date":"2025-11-24T07:46:18","date_gmt":"2025-11-24T07:46:18","guid":{"rendered":"https:\/\/equiton.ca\/?p=49433"},"modified":"2025-12-17T07:19:13","modified_gmt":"2025-12-17T07:19:13","slug":"confidence-in-the-future-of-multifamily-rentals","status":"publish","type":"post","link":"https:\/\/equiton.ca\/fr\/blog\/viewpoint-market-commentary\/confidence-in-the-future-of-multifamily-rentals\/","title":{"rendered":"Q2 2025 Market Commentary and Outlook \u2013 Confidence in the Future of Multifamily Rentals"},"content":{"rendered":"
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Q2 2025 Market Commentary and Outlook \u2013 Confidence in the Future of Multifamily Rentals<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Published On: September 12, 2025
Categories: Viewpoint Market Commentary<\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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Q2 2025 Market Overview<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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  • While tariff-induced uncertainty remains, its impacts on the Canadian economy appear to be modest so far. Advance estimates<\/span><\/a> suggest the economy was essentially unchanged in the second quarter of 2025, with increasing Canadian<\/span><\/a> consumer spending and unexpectedly large<\/span><\/a> job gains helping to offset weakness concentrated on the country\u2019s more trade-dependent sectors.<\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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  • The Bank of Canada held its policy interest rate steady in the second quarter, extending a slower-than-expected recovery in homebuying activity stemming in part from trade uncertainty. Home resales rose<\/span><\/a> for three consecutive months<\/span><\/a> in the quarter as softening prices appeared to find their bottom in several cities. While it may be too soon to declare a rebound, these could be early signs that a recovery is taking shape.<\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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  • Normalizing after years of rapid growth, Canadian average asking rents remain historically high \u2014 up 11.9%<\/span><\/a> from three years earlier \u2014 despite ending the quarter down 3.3% Y\/Y. Purpose-built apartment rents remained the most resilient, decreasing only 1.1% Y\/Y at the end of the quarter versus 4.9% for condo apartments and 6.6% for houses and townhomes.<\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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  • In a display of its characteristic resilience,<\/span><\/a> Ottawa ended the quarter with rent growth<\/span><\/a> across all unit types (+3.7% Y\/Y).<\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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  • Led by Canada\u2019s western provinces, the pace of housing starts increased nationally<\/span><\/a> by 4% in the first half of 2025 compared to the same period in 2024, at a rate of 283.5k<\/span><\/a> annualized units in June. However, most homebuilding activity did not take<\/span><\/a> place in Canada\u2019s densest urban markets, particularly in Ontario and Quebec, where the gap between supply and demand is expected to widen.<\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Portfolio Update<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Market fundamentals for multifamily assets remained strong while affordability challenges in the broader Canadian housing sector persisted. Against this backdrop, Management maintained fundraising momentum and continues to evaluate and pursue targeted growth opportunities for the Equiton Residential Income Fund Trust (the Trust).<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    Portfolio expansion in Western Canada<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    The Trust recently acquired two properties in Western Canada. Mountain Park Residences, a purpose-built rental community in Burnaby, British Columbia, represents a strategic entry into one of Canada\u2019s fastest-growing rental markets and the Trust\u2019s first property in the province. Central Tower, a newly built (2018) building, is the Trust\u2019s fourth property in Alberta.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    \n\t\t\t\t\t\t\t\t\tThese acquisitions build on the Trust\u2019s growth in 2024, when nine buildings were added to its portfolio.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tProgress at Maison Riverain rental development\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tThe Trust\u2019s Maison Riverain development project in Ottawa continued to make strong progress in Q2\u201925, with Tower 1 lease-up advancing steadily and Tower 2\u2019s foundation construction underway. Ottawa\u2019s resilient occupancy levels and rental growth continue to support the project\u2019s immediate and future outcomes.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tPerformance\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tManagement\u2019s disciplined financial strategy continues to support long-term value creation, backed by strong operating results and prudent leverage.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tPortfolio-wide, revenue and net operating income (NOI) increased Y\/Y by 39.3% and 38.3%, respectively. For the six months ended June 30, 2025, the Trust achieved operating revenues of $36.6M and NOI of $20.6M \u2014 reflecting the incremental contribution of 2024 acquisitions and operational enhancements across the Trust\u2019s portfolio. Second-quarter same store metrics remained resilient, with Y\/Y revenue and NOI up 4.2% and 3.4%, respectively.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tOccupancy remained healthy at 96.0%, aligned with the national average and supporting continued income stability. Same store market rent growth of 8% Y\/Y, combined with the turnover of 329 units in the first half of 2025, resulted in a 14.6% lift on rents and 5% growth for in-place rents. At 29.1%, the Trust\u2019s gap to market provides healthy potential for future growth as market conditions evolve.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tThe Trust continued to implement expenditure controls and operational efficiency initiatives, with same store water expenses reduced by 5% Y\/Y through sub-metering efforts and targeted energy conservation initiatives. The Trust\u2019s average cap rate held steady at 4.48%, reflecting stable valuations and the strength of its income-producing portfolio.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tThe Trust\u2019s mortgage profile remains conservative, with a mortgage debt to gross book value ratio of 52.3%. In addition, 99% of the Trust\u2019s outstanding mortgage principle is CMHC-insured, providing access to favourable lending rates and enhanced financing stability. With limited debt maturities in the near term, the Trust maintains refinancing flexibility, stable distributions, and the ability to capture long-term upside as borrowing conditions improve.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tAverage Resident satisfaction scores continued to improve in every category, climbing 2.8% Y\/Y across the Trust\u2019s portfolio, further reinforcing Management\u2019s commitment to providing high-quality, community-oriented rental housing.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Outlook and Portfolio Strategy<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    \n\t\t\t\t\t\t\t\t\tWhile rents have softened from historic highs across Canadian rental markets \u2014 particularly in higher-cost urban centres where new supply is being absorbed \u2014 Management continues to monitor the market and each property\u2019s leasing activity to optimize rental rates, preserving long-term net asset value.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tConfidence in multifamily rental market\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tManagement has prioritized targeted leasing incentives and operational efficiency over aggressive repricing strategies, reflecting a disciplined approach in line with institutional best practices. This strategy underscores Management\u2019s confidence in the long-term strength of multifamily rents, which are expected to rise steadily as population growth \u2014 despite recent moderation \u2014 continues to trend upward then ultimately outpace the supply added during the current wave of completions. A potential recovery will be shaped by a range of external factors, including ongoing tariffs, delayed policy implementation, and a more cautious investor climate.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Apartment-style housing completions are expected to continue through the remainder of 2025. A sharp decline in new starts will likely result in a significant supply shortfall by 2027-2029. At the same time, government incentives such as GST relief and development charge reductions have been announced but not enacted, prompting many buyers and developers to remain on the sidelines.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    \n\t\t\t\t\t\t\t\t\tBuilding a resilient foundation for future growth\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tIn this environment, the Trust\u2019s disciplined strategy and long-term focus offer a distinct advantage. The Trust continues to advance development projects, such as Maison Riverain, while actively exploring future rental development opportunities.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tWith lower construction labour costs and fewer competitors in-market, there remains a narrow window to access high-quality sites at more favourable pricing. This allows the Trust to enter otherwise exclusive markets at a discount and build affordably into a period of expected supply scarcity.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tThrough a combination of selective acquisitions, proactive portfolio management, and diversification that includes new development, the Trust is building a resilient foundation for future growth. By focusing on well-located, income-generating assets and positioning for tomorrow\u2019s supply-demand dynamics, Management continues to navigate the market cycle and deliver growth opportunities, laying the groundwork for sustained value creation in the years ahead.\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tFind Equiton\u2019s previous quarterly report here:\u202f Q1 2025 Market Commentary and Outlook \u2013 Private Canadian Rentals a Bright Spot Amid Volatility<\/span><\/a>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    \n\t\t\t\t\t\t\t\t\tInformations prospectives\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    Certain information in this communication contains \u201cforward-looking information\u201d within the meaning of applicable securities legislation.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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  • Forward-looking information may relate to future events or the Trust\u2019s performance.<\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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  • Forward-looking information includes, but is not limited to, information regarding the Trust\u2019s distributions, growth potential and volatility, investor returns, ability to achieve operational efficiencies, objectives, strategies to achieve those objectives, beliefs, plans, estimates, projections and intentions; and similar statements concerning anticipated future events, results, circumstances, performance or expectations and other statements that are not historical facts. These statements are based upon assumptions that the management of the Trust believes are reasonable, but there can be no assurance that actual results will be consistent with these forward-looking statements.<\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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  • Forward-looking information involves numerous assumptions, known and unknown risks, and uncertainties that contribute to the possibility that the forward-looking statements will not occur and may cause actual results to differ materially from those anticipated in such forward-looking statements. Some of these risks are discussed in the section \u201cRisk Factors\u201d in the Offering Memorandum. These forward-looking statements are made as of the date of this communication and the Trust is not under any duty to update any of the forward-looking statements after the date of this communication other than as otherwise required by applicable legislation.<\/li>\n<\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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