Calgary sees strong suburban retail demand and narrowing housing supply gap

Calgary is experiencing significant shifts in both its retail and residential real estate markets. According to a report from CBRE, the city’s suburban retail rental market is among the strongest in Canada. Rapid population growth is driving demand for commercial spaces in suburban areas, with some neighborhoods like Legacy reporting vacancy rates near zero. This demand for services, including grocery stores and daycares, follows new residential developments, though the city’s downtown continues to face high vacancy levels.

In the residential sector, the Canada Mortgage and Housing Corporation (CMHC) reports that Calgary has narrowed the supply gap required to restore pre-pandemic housing affordability. Due to years of record construction, the estimated annual housing units needed to reach affordability levels by 2036 has been cut in half compared to previous estimates. The city requires between 4,000 and 5,000 additional units annually to meet this goal. While the city recorded 27,000 housing starts last year, CMHC notes that supply growth may moderate as the current development pipeline is delivered due to rising costs and economic uncertainty.