Canada Retail National Report

Healthy retail fundamentals to persist in 2024. Canada’s retail vacancy rate fell to its lowest level on record last year. Strong population growth propelled overall demand, keeping net absorption on par with the 2022 level, despite elevated interest rates. Construction activity, however, was impaired by tough financing conditions, which resulted in a 12 per cent contraction in new supply. In 2024, moderating consumer demand will lead to a more visible decline in net absorption, as elevated borrowing costs continue to be absorbed and Canada’s consumer base expands at a slower pace, due to recent changes in immigration policy. A significant increase in deliveries in Edmonton and Montreal will push 2024’s completions ahead of last year’s. These factors, combined, are expected to put a pause on the falling vacancy rate, helping it stabilize below 2.0 per cent.