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Shoppers outside the Holt Renfrew flagship store on Bloor Street in Toronto Jun 26, 2012.Moe Doiron/The Globe and Mail

Canada's real estate market may have seen some of the sharpest price gains in the world since the end of the recession, but its prime shopping strips are still dirt cheap compared to cities around the world.

A report by Colliers International found that the strip of Bloor Street that runs through Toronto's Yorkville neighbourhood and features some of the country's fanciest stores is the most expensive in Canada at $310 (U.S.) per square foot.

That makes it the 34th most expensive strip in the world, with New York's Fifth Avenue taking top spot at $2,633, a gain of 22 per cent in the last year.

That trend may not continue, the report warns, as macroeconomic factors begin to weigh on strong regional centres. But while Colliers warns on paper that weakening consumer confidence has already begun to impact high-end stores' revenue, James Smerdon, an analyst with Colliers in Vancouver, said this shouldn't have a significant effect on Canada in the near term.

"From an American retailer's perspective, it's still an opportunity to come to Canada," Mr. Smerdon said. "A Canadian store is going to be more productive. ... It would take a significant economic downturn to put the brakes on that."

As the Canadian market is less saturated with retail space, Mr. Smerdon added there remains room for new U.S. stores to join the fray.

He warned that American companies may flounder if they don't know the logistical issues of operating in Canada, including the large distances between major markets and low vacancy rates.

Only in the case of a long-term recession, Mr. Smerdon said, "would you eventually see both incumbent and international retailers reconsidering expansion plans."

Neil Downey, an analyst with RBC Capital Markets, said, "It's been a pretty incredible ride for the Canadian consumer and consumer spending for many years now," powered by strong employment levels, consumer confidence levels and low interest rates.

But Mr. Downey warned this situation has also manifested "some of the highest consumer debt levels we've ever seen," as measured by debt-to-disposable income. While he said that luxury-item spending remains strong, "if spending is going to grow, it has to grow at a pace that's more in line with income growth."

The Colliers report looks at top retail strips around the world and tracks average rents. Of the 129 markets studied, 51 saw higher rents in the last year, 49 were flat and 24 were down (five were new additions).

In Canada, Toronto was priciest at $310 (a gain of 3.3 per cent). Of the Canadian retail strips surveyed, Halifax's Spring Garden Road saw the highest gains – 27 per cent – at $70. A high turnover rate and rent increases at nearby shopping centres saw "straight supply and demand" causing rental prices jump so high in Halifax, Mr. Smerdon said.

Other shopping districts surveyed included:

  • Robson Street, Vancouver ($150.19, down 25 per cent)
  • Alberni Street, Vancouver ($105, up 10.5 per cent)
  • Rue de la Montagne, Montreal ($80, unchanged)
  • Greene Avenue, Montreal ($60, unchanged)
  • Government Street, Victoria ($60, unchanged)
  • West Fourth Avenue, Vancouver ($47.50, unchanged)
  • Byward Market, Ottawa ($45, up 12 per cent)