Canada Real Estate Outlook

Structural shifts are driving changes across all markets, creating new risks and opportunities

February 07, 2023
  • Scott Figler
  • Shawna Rogowski
  • Heli Brecailo
  • Chad Piche

As rising interest rates continue to slow the economy, the real estate sector is beginning to feel the consequences, though it remains resilient.

  1. Capital Markets: Despite posting the strongest year on record, investment flows have slowed markedly over the course of the year.

  2. The industrial market continues its torrid pace, though record new supply pushed vacancy up for the first time in 3 years.

  3. The Office market continued to see rising vacancy across almost all markets. This is driven by significant new completions as well as rising sublease availability that has nearly doubled from pre-pandemic levels.

  4. The Multifamily rental market will see demand increase as more households put off the decision to buy and remain in the rental pool for longer.

  5. The retail market is seeing foot traffic return to physical spaces, as evidenced by rising sales for restaurants, gasoline, and apparel and slowing sales for “lockdown” items like electronics and home improvement goods.

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