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2022 Year in Review

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It’s been a very unpredictable and tumultuous year. 12 months ago, we had overnight interest rates of 0.25%, no conflict in the Ukraine, and the first Omicron cases (remember that?) appearing.

  1. Industrial leasing had an incredible year (again), with record high rents and vacancy below 1% in many markets. Rents now exceed $10/psf in every market Colliers tracks, with some doubling their rents during the pandemic.
  2. Interest rates rose at the highest pace ever in a single year, a full +4% over 2022. Inflation remains far above target levels, but it's unclear if we'll see further rate hikes.
  3. Major transit developments made headlines in 2022, including Toronto's Ontario Line and Vancouver's Broadway Subway Project. Montreal's Reseau Express Metropolitan (26 stop light rail) is near completion and scheduled to open next year.
  4. Residential house prices peaked early in the year and have declined since . Year-over-year change in national house prices was +30% in February and -5% in November.
  5. Travel roared back in 2022 with the lifting of restrictions. Key metrics for hotels such as average daily rate and revenue per available room are up >10% from pre-pandemic levels.
  6. Hospitality and entertainment also enjoyed a renaissance; OpenTable reported restaurant reservations in Canada have been above 2019 levels for the last several months.
  7. Hybrid work settled in as the norm in many office-occupying industries such as insurance, banking, consulting, and technology. The last holdout, the federal government, announced 3 days a week return to office last week.
  8. Investment sales had a record showing in the first half of 2022, exceeding even last year's bull market. However increased borrowing costs cooled the market in the second half of 2022.
  9. Suburban office is outperforming downtown in many markets, with significantly lower vacancy rates in Vancouver, Saskatoon, Regina, Calgary, Waterloo, Winnipeg, and Halifax.
  10. The Canadian dollar declined considerably during 2022 to 73c US. However, the CAD appreciated relative to several other currencies such as the Australian dollar and the Japanese Yen.

The big questions for 2023 as I see: rates, return to office and retail. Can rates stay high or will the economy suffer too much? Is hybrid work a permanent reality, or will a weaker labour market change the ”balance of power” between employees and employers? Can ”main street” survive a recession (if there is one... I’m not convinced yet), or will e-commerce continue to take over in grocery, books, fashion and electronics?

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Pour plus d’informations, veuillez contacter:

Adam Jacobs

Head of Research | Canada

Toronto Downtown

Colliers Canada's head of research, leading a cross-country team of 20 mapping, analytics and research professionals. Formerly head of Canada research at Cushman Wakefield and Director of Analytics at Oxford Properties. Featured in mainstream publications such as the Toronto Star, industry publications and podcasts. Specializing in the big picture and the fundamentals driving real estate - demographics, the macro environment and the global economy. 

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