The new era of real estate financing in Canada

The real estate financing landscape in Canada has fundamentally shifted. If you've been in this industry for more than a few years, you've felt it—the whiplash of 2022's rapid rate hikes, the defensive posture of 2023, and now, the cautious optimism of 2025. But what we're experiencing isn't just another turn of the cycle. It's a complete recalibration of how capital flows, who gets access to it, and what lenders are really looking for.

At the Montreal Real Estate Forum, we spoke with Marco Millin, Vice President, Real Estate Financing at Laurentian Bank to discuss where we are and where we're headed. What emerged from that conversation wasn't just a snapshot of current conditions—it was a roadmap for how successful players in this space will need to think differently about financing over the next five years.

Watch the full interview below, or read on for key insights and analysis:

From survival mode to strategic opportunity

After the Bank of Canada began its rate-cutting cycle in June 2024, the market experienced what can only be described as a collective exhale. Borrowing capacity improved. Refinancing became viable again. Developers could pencil out new construction projects—even with stubbornly high building costs still in play.

But here's the reality: accessible doesn't mean easy. Quebec remains one of Canada's most dynamic provinces for housing starts and demographic growth, with mortgage registrations jumping more than 20% in 2025. However, that growth is driven almost entirely by refinancing, not new purchases. The market is resilient, but it's operating at two speeds—well-capitalized projects in prime locations are getting financed, while everything else faces much tougher scrutiny.

The new rules of the game

Financing conditions now vary sharply based on geography (Montreal versus secondary markets), asset class (purpose-built rentals versus other property types), and property status (stabilized versus value-add). Lenders are heavily favouring multi-unit residential projects, especially those supported by demographic growth and aligned with housing supply objectives.

Government programs like Quebec's SHQ and PFH frameworks continue to support affordable housing and mixed-income projects, with private lenders increasingly co-lending alongside public programs. This creates opportunities—but also complexity that requires expertise to navigate.

Banks as strategic partners

Perhaps the most profound shift is this: banks are evolving from capital providers to structuring partners. By 2030, banks won't compete primarily on headline pricing. Their value will lie in how they allocate risk, structure capital, and integrate with other financing sources.

"The question won't be 'Can we finance this?' but 'Where does the asset lie in the capital continuum?'" Millin explained.

This means banks will underwrite exit certainty, not just entry metrics. They're thinking about your refinancing risk three years from now, not just your loan-to-value ratio today. Relationship banking will matter more than balance sheet lending, and hybrid capital stacks blending conventional financing, CMHC-backed loans, and private credit will become the norm.

What this means for you

The most trusted lenders won't be those with the lowest rates today—they'll be those that reduce your refinancing risk, shorten your decision cycles, and protect your equity over multiple market cycles.

Specialist banks like Laurentian are positioning themselves to guide clients across financing phases—from acquisition to construction to refinancing. "We lend across cycles, not just peaks," Millin noted. "We think in terms of portfolio, not single transactions."

The next few years will be defined by selective growth, sophisticated capital structures, and continued segmentation between prime and non-prime borrowers. If you're well-capitalized, working on projects with strong fundamentals in the right locations, and partnering with lenders who understand your business, you're positioned to thrive.

The era of cheap, easy money is over. But the era of strategic, intelligent capital is just beginning—and for those who adapt, the opportunities are significant.

Want to stay ahead of the trends shaping Canadian real estate financing? Join us at an upcoming Canadian Real Estate Forums event, where industry leaders gather to share insights, build relationships, and navigate the future of real estate together. Learn more about our upcoming conferences and forums.