This week, the ATB Real Estate Team published their inaugural industry outlook: The Forces That Defined 2025 and Will Shape 2026. The report points to a clear shift: following several years of rapid expansion, Alberta's real estate sector is entering a welcome period of balance and stabilization in 2026.

After collaborating to pinpoint the major trends of the past year impacting the real estate sector, ATB’s Economics team has invited Neil Ternovatsky, AVP and Head of Real Estate, to guest-author today’s Twenty-Four and share his highlights from the report, as well as additional insights on the state of real estate in Alberta.

2025 in review: The defining trends impacting real estate

The consensus is strong: Alberta is slowing down from its frenetic pace of population growth, but remains a province of relative strength, underpinned by solid economic fundamentals.

Here are the key takeaways from our lookback at the year that was:

Population growth drove real estate momentum

Ongoing population growth was Alberta’s single most defining real estate trend of the year, significantly boosting demand across all property types—residential, commercial, and industrial.

Alberta reinforced its status as Canada’s fastest-growing province by crossing the five million population mark in mid-2025, a 2.5% increase year-over-year. This surge was primarily driven by people moving to the province for its lower cost of living, more affordable housing options, and better job opportunities, which, in turn, intensified competition for both new and existing homes.

Alberta’s affordability edge fueled record home building

Affordability remained a major advantage in Alberta, with the benchmark resale home price ($506,600 in November 2025) significantly lower than the national average (over $674,800). This competitive pricing, coupled with record-breaking housing starts—projected to reach an all-time high of about 55,000 in 2025—helped relieve pressure on prices and rents by adding much-needed supply to the market.

Notably, this construction surge heavily favoured multi-unit developments, with federal and provincial programs actively supporting the effort to align new supply with the growing demand.

Interest rates are lower, but not a silver bullet

The Bank of Canada lowered its benchmark interest rate from 5% to 2.25% during the 2024–2025 easing cycle, reducing borrowing costs for some households and businesses.

However, while these lower rates certainly boosted affordability and confidence, they were not a "silver bullet" for ensuring strong economic growth, as their positive effects were offset by persistent factors such as global trade uncertainty and strained household budgets.

Job market: A growing labour force outpaced hiring

Rapid population growth swelled the labour force, but job creation failed to keep pace, creating a headwind for real estate demand, with Alberta's unemployment rate averaging 7.3% through November 2025.

This imbalance meant many Albertans remained unemployed or underemployed, leading to softened demand for housing ownership while simultaneously keeping pressure high on the rental market. It also prompted businesses to delay real estate investment and expansion plans.

2026 watchlist: What we expect to see as the sector stabilizes

As the real estate market stabilizes in 2026, we are closely monitoring how each subsector will fare in the year ahead.

Multi-family: This subsector is expected to transition from rapid expansion to a more balanced period as the market absorbs the large volume of new supply added in 2025. Construction momentum is projected to ease. Rents are expected to soften in the first half of the year and stabilize toward the latter part of 2026. All told, we expect flat to slightly decreased average rents for the year.

Industrial: This subsector is expected to remain one of Alberta’s top real estate performers. It will see low vacancy and steady absorption, even as overall growth across the market moderates.

Retail: This subsector is expected to be resilient, supported by high occupancy rates and consistent demand for necessity-based retail in suburban areas due to population growth. Performance is increasingly bifurcated as mounting budget pressures pivot consumers toward essentials, sustaining grocery-anchored assets while softening demand and slowing leasing commitments from discretionary tenants.

Office: Market polarization persists, with newer and A-class buildings continuing to outperform older inventory. The widening performance gap and high replacement costs could draw investor interest to some B- and C-class assets for reinvestment or repurposing.

Hospitality: Strength is expected to continue, supported by tourism. However, the momentum is expected to moderate from the peak performance seen in 2025.

In conclusion, 2026 is poised for healthy stabilization in Alberta real estate.

Although more moderate population and retail spending growth are expected, the province's overall economic landscape will remain resilient.

Driven by strong long-term fundamentals, Alberta continues to be one of Canada’s most dynamic real estate markets. Looking ahead, Alberta offers a more compelling real estate investment outlook than many provinces, supported by stronger demographics and a healthier market balance.

ATB’s Real Estate Team expects 2026 to be a year of stabilization, with opportunities emerging for investors who stay focused on fundamentals. For more in-depth insight, access the full report here.

Answer to the previous trivia question: Poinsettias got their English name from Joel Roberts Poinsett, an American diplomat and amateur botanist who sent samples of the plant to the U.S. while in Mexico.

Today’s trivia question: True or false? Christmas nutcrackers were originally able to crack actual nuts with their teeth.