After a volatile start to 2025, the Canadian multifamily housing sector is showing some signs of life. May brought a welcome boost in renter activity, with active prospects rising by 3.7% and total leads climbing 6.5% across the country¹.
But even as numbers tick upward, the big-picture concerns haven’t gone anywhere.
From new trade tensions and cost pressures to shaky investor confidence, the landscape remains complex and increasingly influenced by forces outside the industry’s direct control.
In June, the U.S. doubled tariffs on Canadian steel and aluminum imports, bringing them to a punishing 50%². These tariffs are hitting critical inputs, injecting cost uncertainty at a time when developers are already navigating tight budgets and hesitant lenders.
What complicates matters further is that Canada’s countermeasures weren’t in response to this June escalation, they were introduced months earlier, after the U.S. first began ramping up tariff activity in the name of National Security³. Since then, over $30 billion worth of U.S. goods (including various manufactured items, tools, and industrial inputs) have faced Canadian retaliatory tariffs³. The result? Widespread pressure on supply chains and pricing, even for sectors not directly named in the tariff lists.
The federal government did roll out relief though this past April: a six-month temporary tariff remission on certain U.S. goods used in Canadian construction and manufacturing⁴. While helpful, it’s only a short-term fix and not everyone qualifies. That leaves developers and suppliers in limbo, pricing projects under conditions that could change in six months, or even sooner.
Even before the tariff escalation, financing had become a hurdle. While the Bank of Canada has held its policy rate steady since March, the current overnight rate is still at 2.75% - a full two percentage points lower than it was in June 2024⁵, but still on the high side of what’s considered a neutral rate. That might not sound alarming, but for developers already wrestling with inflationary costs and tighter lending conditions, it’s enough to slow or stall new projects.
And for those projects already underway, the challenges don’t stop at financing. Skilled labour shortages continue to delay timelines and drive up costs⁶. With workers in short supply and wages climbing, it’s getting harder to keep projects on track or on budget.
Interestingly, April still delivered a surprise: national housing starts spiked 30% month-over-month and 17% year-over-year, making it the strongest April on record for cities with over 10,000 people⁷. Most of that growth came from Québec and the Prairies. CMHC flagged the uptick as promising but warned that “current economic uncertainty will have consequences for the supply and demand of new housing”⁷. In other words, even strong months come with asterisks.
On the demand side, May brought a modest rebound. Tertiary markets saw a 10.5% jump in active prospects, and primary markets rose 5.4%¹. Those are encouraging numbers but year-over-year comparisons still paint a bleak picture: active prospects are down 21.3%, and total leads are down 20%¹.
Secondary markets are bearing the brunt of it. Not only have they seen the sharpest drop in prospects, but they’ve also experienced a surge in active property listings, resulting in a 32.9% decline in average prospects per property¹. That mismatch is making it harder for leasing teams to fill units, even when the price and product are right.
The good news? Renters who are still in-market seem more serious. Average leads per renter went up by 2.6% in May, a sign that the intent to lease is still strong among those actively searching¹. With the right positioning and streamlined lead follow-up, that could mean improved conversion rates, if teams are ready to move fast.
The federal government’s short-term response to the tariff fallout includes not just the six-month remission but also the Large Enterprise Tariff Loan Facility, a liquidity program aimed at helping large Canadian businesses weather the trade dispute⁴. These are positive steps, but they come with expiry dates and eligibility requirements. For many in the construction space the question is whether this support will last long enough to make a real difference.
The Liberal government has also committed to a new $5 billion Trade Diversification Corridors Fund and plans to prioritize Canadian suppliers in federal procurement⁸. However, those promises take time to roll out and right now the industry is looking for solutions it can act on today.
As we all know, this isn’t just a construction story, it’s a housing story. When building becomes more expensive and more uncertain, it slows the delivery of new rental supply. And when interest rates, tariffs, and labour shortages collide, the risks of delay, cancellation, or cost escalation compound.
The multifamily sector isn’t immune. Yes, May’s renter rebound is good news, but we’ve seen false starts before. Until some of these broader headwinds settle, leasing teams and developers alike would be wise to stay nimble. Sharpen your positioning. Streamline the renter experience. And keep a close eye on cost dynamics that might not be within your control, but still shape your success.
For leasing professionals and multifamily marketers, this moment isn’t just about reacting to external pressures, it’s about retooling strategy in real time. Tariffs and cost volatility may feel like upstream issues, but their effects trickle down fast. Delayed projects, tighter budgets, and renter hesitancy all shape the leasing environment, whether you’re pre-leasing a new development or trying to stabilize an existing community.
So what now?
Start with the story you’re telling. In uncertain conditions, renters respond to clarity. Be transparent about what sets your property apart, whether it’s price stability, move-in perks, flexible lease terms, or standout amenities. If you’ve got availability now, say so. If incentives are time-sensitive, be clear. No one has time for vague value props.
Double down on lead quality, not just lead volume. With fewer renters in-market, it’s more important than ever to nurture the ones already raising their hands. That means fast follow-up, thoughtful communication, and marketing that matches their search mindset. The “wait and see” crowd might not convert, but the serious ones will, if you’re ready.
And finally, stay close to your data. Demand patterns are shifting month to month, and what worked last year might not work now. Tweak your messaging, adjust your targeting, and don’t be afraid to test. The teams that stay curious and adaptive will be the ones that ride out this turbulence, not just with heads above water, but with leases signed.