For the past few years, multifamily real estate has been one of the most talked about investment strategies. It’s been a solid go to for investors looking for reliable cash flow, strong demand, and long-term appreciation. But now, with interest rates starting to drop and immigration slowing down, people are asking: Is multifamily still a good investment, or are we nearing the end of the boom?
It’s a fair question. Interest rates skyrocketed over the past two years, making it harder to finance deals and pushing some investors out of the market. At the same time, record high immigration drove rental demand through the roof, giving landlords an edge. But now, things are shifting. With borrowing costs expected to ease and fewer newcomers entering the country, could multifamily investors be in for a slowdown?
The reality is more complicated than a simple yes or no. While some factors are changing, multifamily real estate is still one of the most resilient investment strategies—if you know how to play it right.
How Lower Interest Rates Could Shake Things Up
Interest rates have been a major factor in real estate over the past couple of years. When they were raised aggressively to combat inflation, the cost of borrowing went through the roof, forcing many investors to hit pause on acquisitions. Now, with rates expected to decline, financing will get easier again.
For investors, this is great news. Lower borrowing costs mean lower mortgage payments, which improves cash flow and makes deals more attractive. Those who had been sitting on the sidelines, waiting for a break in rates, may now jump back in.
But there’s another side to this. Lower rates also make home ownership more accessible. Some renters who had been priced out of buying may now find themselves able to qualify for a mortgage. If enough people shift from renting to owning, rental demand in certain areas could soften.
That said, affordability is still a massive issue. Even if rates drop, home prices remain high, and lenders aren’t exactly throwing out easy approvals. Many renters will still be unable—or unwilling—to buy, keeping demand for rental properties strong.
So, while some renters may become homeowners, it’s unlikely to cause a mass exodus from the rental market. The affordability gap is still too wide, which means multifamily properties will continue to be a key part of the housing landscape.
Will Slower Immigration Hurt Rental Demand?
One of the biggest drivers of rental demand over the past few years has been immigration. Canada has seen record breaking numbers of newcomers, many of whom rent before buying a home. This created intense competition for rental units, pushing vacancy rates down and rents up.
But with the federal government now planning to slow immigration, particularly international students and temporary residents, some investors are worried that demand for rentals could drop.
While there may be some impact, the overall effect is likely to be minimal. Canada is still bringing in hundreds of thousands of new residents each year, and even with a slight slowdown, there’s still a housing shortage. Demand isn’t going anywhere overnight.
Also, immigration isn’t the only factor driving rental demand. People are moving within Canada for work, affordability, and lifestyle reasons. Cities with strong job markets and lower living costs will continue to attract renters, keeping the multifamily market healthy.
How to Choose Wisely in Today’s Market
While the fundamentals of multifamily investing remain strong, not every deal is a good deal. With market conditions shifting, investors need to be more selective than ever. Here’s how to make smarter choices:
✅ Look for Markets with Strong Rental Demand
Not all cities will see the same level of demand. Focus on areas with job growth, low vacancy rates, and a steady flow of new residents. Secondary markets with affordable rents often have better cash flow than overpriced major cities.
✅ Prioritize Cash Flow Over Speculation
In a high rate environment, banking on appreciation alone is risky. A good investment should generate solid cash flow from day one. If a property isn’t covering expenses and making you money right away, you may want to reconsider.
✅ Understand Local Rent Control Laws
Some provinces, like Ontario and BC, have strict rent control policies that limit how much you can increase rents. This can impact long term profitability, so make sure you know the rules before you buy.
✅ Invest in Properties Tenants Actually Want
With more rental options available, renters have higher expectations. Amenities like in unit laundry, updated kitchens, and smart home features can help attract and retain quality tenants.
✅ Plan for Future Refinancing
If you’re buying at today’s rates, keep an eye on refinancing opportunities as rates drop. Locking in a lower mortgage rate in the future could dramatically improve cash flow.
The investors who thrive in this market aren’t just buying anything—they’re being strategic and focusing on properties that can weather market shifts.
Final Thoughts: The Multifamily Boom Isn’t Over—It’s Just Evolving
The multifamily market isn’t crashing, but it is changing. Investors who blindly bought anything and assumed rents would always rise are finding out that’s not always the case. But for those who do their homework, focus on cash flow, and buy in the right locations, multifamily remains one of the best ways to build long term wealth.
Lower interest rates will make financing easier, but affordability challenges will keep many people renting. Immigration may slow, but rental demand isn’t disappearing. The fundamentals are still strong—but only for investors who are willing to adapt.
If you’re looking to grow your real estate portfolio, multifamily is still a solid bet. But in today’s market, the key isn’t just buying—it’s buying smart.
