Canada Retail National Report

Outlook remains positive despite short-term pullback. Canada’s retail sector saw robust performance in the second quarter of 2024, with the vacancy rate declining to a record low of 1.5 per cent. Although rent growth has cooled, it remains at a healthy 3.4 per cent year-over-year. Demand for space is expected to soften for the remainder of the year, however, as elevated interest rates weigh on consumer spending. Decelerating population growth is also likely to slow retail sales growth. This moderation in demand is forecast to cause an uptick in vacancy, marking the first annual increase since 2020. Looking ahead, as interest rates decline to more stimulative levels, a recovery in per-capita consumer spending is expected to drive growth into 2025.