Nobody knows exactly what U.S. President Donald Trump will do next. That’s the reality apartment owners and developers in Canada now face.

The tariffs imposed this week by the U.S. on Canada have created uncertainty in the market.

While their full impact remains to be seen, one thing is clear: we are likely heading into a recession. And in a recession, there are both challenges and opportunities.

At SVN Rock Advisors, we’re seeing something new: developers and lenders are returning for rent updates on studies we conducted just a year ago. Rents are changing fast — mostly declining — creating ripple effects across the apartment industry.

Whether you own a stabilized building, have a project under construction, or are looking for new opportunities, now is the time to assess where we are and where we’re headed.

Canada’s response: What’s next?

How will Canada respond? Will our leaders take an aggressive, retaliatory stance? Will they wait and see?

We’ve seen the initial immediate responses, but will there be more?

We can anticipate that capital will become more cautious. Uncertain times lead people to hold onto cash, slowing investment across multiple sectors, including real estate.

This disruption may also force Canada to rethink its economic strategy. Historically dependent on U.S. trade, we may now have an opportunity to diversify our markets, opening new long-term possibilities — including inter-provincial trade solutions.

Impact on apartment owners

For apartment owners, the most immediate impact of a weakening economy is on rents. The rental market follows a pattern:

• class-A rents decline first, as high-income renters hesitate to commit amid economic uncertainty;
• class-B landlords must adjust rents downward to remain competitive; and
• class-C workforce housing, often home to long-term renters in essential industries, remains the most stable.

Now is not the time to panic — but it is the time to focus. You don’t control interest rates or economic policy, but you do control your property management.

Keep vacancies low, refine marketing strategies and ensure your leasing team is sharp. Rent optimization, resident experience and proactive marketing will be keys to maintaining occupancy.

Challenges for new construction

If you’re in the middle of an apartment development project, the challenges are even greater. Stopping mid-construction isn’t an option, but leasing a new building in a softening market requires strategy.

Be prepared to adjust rents to attract tenants. Explore alternative leasing strategies, such as accommodating roommates to enhance affordability. Ensure your unit mix aligns with demand — two- and three-bedroom units may perform better than luxury micro-units.

Achieving full occupancy is critical. Once stabilized, your asset becomes more resilient. But getting there will require agility, creative marketing and a willingness to adapt.

Opportunities for developers

While some see crisis, others see opportunity. If you’ve been in the apartment business long enough, you know that downturns create openings for those prepared to act.

Consider the shifts already occurring:

• Land prices are falling: We’re seeing downward pressure on land values, a trend likely to continue.
• Construction costs may stabilize: The industry has faced skyrocketing labor and material costs, but a slowdown in new projects could make pricing more competitive.
• Skilled talent will become available: A booming market made it difficult to find experienced development professionals. A slowdown will make it easier to assemble top-tier teams.

For long-term thinkers, the best time to build is often when costs are low and competition is hesitant. Developers who can push forward strategically will be well-positioned when the market rebounds.

The big picture: Multifamily remains strong

Despite challenges, one thing remains true: apartments are among the most stable real estate assets in uncertain times. Demand for rental housing isn’t going away.

Governments may introduce subsidies or incentives to keep housing development moving. And while individual market segments may face volatility, the fundamentals of multifamily remain strong.

The key takeaway now? Stay focused, stay informed and adapt. Economic shifts create fear — but they also create opportunities for those who think long-term.

Want to learn more about how Trump’s tariffs will impact apartments in Canada? Join us for our free webinar, The Impact of Trump’s Tariffs on Apartments in Canada, on Thursday, March 6 at 1 p.m. We’ll dive deeper into market trends, risk mitigation strategies, and emerging opportunities in today’s shifting landscape.

Preparation will be critical for you to deal with whatever comes next.