Mixed Signals in Canada’s Commercial Real Estate Market: Q3 2024

Canada’s commercial real estate market is showing mixed signals, with some areas seeing growth while others face persistent challenges, according to the Canadian Real Estate Association’s (CREA) Q3 2024 report.

Non-residential building permits rose nearly 9% from Q2 2023, driven by industrial and institutional projects, particularly in Ontario and Quebec. Major investments in healthcare and infrastructure projects helped push the national permit value to a record high. However, commercial real estate investment remains weaker, impacted by a fluctuating Canadian dollar and potential tariffs on exports to the U.S.

The labour market is showing signs of strain, with Canada’s unemployment rate holding steady at 6.5%. Many younger Canadians and newcomers are finding it difficult to secure employment. In response, the federal government is making changes to its temporary foreign worker program, encouraging employers to prioritize Canadian workers.

Housing starts have been sluggish, with growth primarily in Alberta, Quebec, and Atlantic Canada. Rising construction costs, regulatory hurdles, and a lack of skilled labour continue to limit new housing development. Government changes to the mortgage charter are expected to help stimulate the housing market in 2025.

Despite these challenges, Canada’s GDP growth is projected to average 2.5% over the next two years. However, inflation, particularly in food and shelter, remains a key concern for consumers.

For more detailed insights, visit CREA’s full report here. Royal York Property Management continues to monitor these trends to provide expert guidance to its clients in navigating Canada’s evolving real estate landscape.