It doesn’t take the stock-picking acumen of Warren Buffett or Prem Watsa to spot the bull case for Canadian senior housing REITs (real estate investment trusts); a crush of Baby Boomers supercharging demand for assisted living as medical science and healthier living push average lifespans higher.
What may be less obvious, and perhaps more pertinent to investors now, is the supply side of the equation. Analysts say rising costs for materials and labour have dragged construction starts to near record lows.
This glaring, apparent imbalance has raised expectations that the coming wave of Baby Boomers will hit demand in Canada’s senior living sector like a “silver tsunami.”
Units of Chartwell Retirement Residences (CSH-UN.TO) and Sienna Senior Living (SIA.TO) have been some of the Canadian REIT sector’s strongest performers since the COVID-19 pandemic, when the senior residence and assisted living industry was hit with steeper operating costs following deadly outbreaks.
“Although valuations for many North American senior housing REITs have increased meaningfully in recent years, we believe the sector’s long-term growth potential is not yet fully reflected in current pricing,” analysts at Toronto-based private money manager Hazelview Investments wrote in their recently published 2026 global outlook report.
REITs in general have been a laggard asset class in recent years. Hazelview notes they underperformed bonds and stock indices in 2025.
“Investor sentiment towards real estate remains remarkably low,” they added in their report. “We believe REITs are too cheap to ignore.”
According to real estate services firm Cushman & Wakefield, Canada’s 80-plus population is set to grow at a compound annual growth rate of 4.8 per cent through 2042. In 2024, the firm estimated 200,000 new senior housing suites will be needed to maintain market equilibrium. It says just 73,000 suites were built in the prior decade.
“The aggregate demand from baby boomers should continue to deliver a healthy operating environment for seniors housing stocks, with an increasingly tightening market,” CIBC Capital Markets analyst Dean Wilkinson wrote in a recent note to clients.
Chartwell and Sienna are his top picks among Canadian senior housing providers. Wilkinson maintains “outperform” ratings on both, with price targets at $22 and $23 per unit, respectively.
Looking back at 2025, CIBC Capital Markets says senior housing was the best-performing REIT category, up 62 per cent. Office was the weakest, according to the bank, declining 10 per cent.
“Canadian seniors once again came out on top for the year, as the sub-sector demonstrated a year of improving fundamentals, aided by a continued recovery from a trough year in 2022,” Wilkinson wrote.
“We believe seniors housing and industrial REITs are set up to post the highest funds from operations per unit growth in 2026, followed by grocery-anchored retail and multi-family (with a preference for U.S. over Canada), and once again the office sector is still trying to find firm footing.”
Hazelview says Canadian REITs outperformed their global peers in 2025, delivering an 11.8 per cent total return versus 8.3 per cent, when adjusting for local currencies.
For 2026, CIBC expects Canadian REITs to deliver “high single-digit returns.”
Last week, RBC Capital Markets published its 2026 preview note for the sector. In the report, analyst Pammi Bir describes Chartwell as “riding the silver tsunami.” He maintains an “outperform” rating on Toronto-listed units, with a $22 price target.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist.