Vancouver Retail Market Report

Healthy demand to hold, following transitory phase. Vancouver’s retail sector entered 2023 on firm ground. Pent-up demand from both local residents and tourists fueled a strong recovery in the metro’s retail sales last year. Space absorption, as a result, remained robust, which maintained the vacancy rate near its pre-pandemic level. In 2023, however, consumers and retailers will have to adapt to the new high interest rate environment for an extended period of time, and may see a slight softening in sales as purchasing power erodes and consumers rein in spending. Vacancy, as a result, may face some upward pressures in the short-term. However, given the extremely tight nature of Vancouver’s retail market, toward the later part of this year, fundamentals should improve as market sentiment stabilizes. Backed by a further recovery expected in the tourism sector and an increase in immigration, retail demand will end the year on a high note.