Montreal Housing Market Outlook 2023
Montreal Market Report Summary
- The benchmark single-family home in Montreal increased by 0.8% year-over-year to $610,800 in August 2023. In comparison, provincially, the benchmark single-family home sale price in Quebec was up 1.6% from a year ago to $528,800.
- Montreal’s benchmark townhouse/multiplex price increased by 4.4% year-over-year to $585,400 in August 2023. In comparison, provincially, the multiplex sale price in Quebec is up by 4.1% from a year ago to $540,200.
- The benchmark condo price in Montreal increased by 1.1% year-over-year to $397,800 in August 2023. In comparison, provincially, the benchmark condo sale price in Quebec is also up by 1.0% from a year ago to $372,500.
- Montreal’s benchmark composite home price increased by 0.7% year-over-year to $521,600 in August 2023. In comparison, provincially, the average home sale price in Quebec was up by 1.2% from a year ago to $471,800.
- The average rent for an apartment in Montreal increased by 16.4% year-over-year to $2,001 for August 2023.
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Montreal Housing Market Summary
Data from the Quebec Professional Association of Real Estate Brokers (QPAREB) indicates that the average price of resale residential homes sold across Montreal in August 2023 was $521,600, a slight increase of 0.7% compared to a year ago.
With a sales-to-new-listings ratio (SNLR) of 51%, the Montreal housing market once again entered a balanced market in August.
Verbatim: What local experts from the Quebec Professional Association of Real Estate Brokers (QPAREB) say about Montreal’s regional housing market:
Residential sales in the Montreal CMA reached 2,753 in August 2023. There were 101 more transactions compared to the same period last year, up by 4%. This level of transactional activity is comparable to the historical average for this period of the year.
“August is usually one of the least active months of the year. While August 2023 is no exception to the rule, the number of sales is in line with the historical average. Transactional activity is thus higher than that recorded last year at the same period. In the first part of 2022, the number of transactions began to be heavily impacted by the successive sharp increases in interest rates. The dynamic is similar for prices, which also compare favourably to those of August 2022, since they had started to fall for the same reasons,” notes Charles Brant, QPAREB Market Analysis Director.
“It is interesting to note that prices have not only recovered lost ground compared to the same period last year but are also maintaining levels close to the peak of 2022. This finding is more or less valid for all major metropolitan areas and property types. In a context where interest rates and prices both remain at high levels, a potential deterioration of the job market in the coming months could make this market stabilization more precarious.”
Month-over-Month Market Expectations
The sales to new listings ratio (SNLR) is the number of home sales compared to new listings. An SNLR under 40% suggests a buyer’s market where buyers have the upper hand and more negotiating power. An SNLR between 40% and 60% is a balanced market, while an SNLR of over 60% is considered a seller’s market.
Market Expectations Breakdown By Property Type
Historical Changes To Benchmark Prices In Montreal By Property Type
Last 10 Years of Monthly Changes to Montreal’s Composite Home Price
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Who’s Buying Montreal Real Estate?
Until recently, the primary demographics driving demand in Montreal’s residential property market were those looking to upsize their homes, foreign investors looking to purchase an investment property in one of Canada’s university towns, professionals who recently immigrated to Canada in the past 5 years, and out-of-province migrants advancing their careers in and around Montreal.
With the passing of the omnibus Bill C-32 legislation, including the foreign buyers’ ban and anti-flipping tax, the Montreal homebuyers’ demographic may be shifting away from foreign investment. However, it remains to be seen whether efforts to limit foreign buyers in Montreal will have an impact; according to Statistics Canada, foreign investors make up less than 5% of homeowners in Montreal’s total homeownership. However, that number significantly jumps to 50% when considering properties valued over $1 million for non-Quebec residents.
According to an article by Newswire, investors and multi-property owners accounted for over 16% of Montreal’s homebuyers in 2021- particularly in downtown, the numbers were even higher.
First-time homebuyers have traditionally accounted for more than half of all purchases. However, that share has slowly declined, reaching a low of 46.8% in June 2021, with real estate investors and multiple property owners picking up the difference.
According to Statistics Canada, multiple property owners represent 15% of owners in BC and Ontario and 20% in New Brunswick and Nova Scotia but hold 30% and 40% of existing housing stock, respectively.
Upsizing by buyers has driven Montreal’s demand for single-family homes, which showed the highest year-on-year price increase of all property types from $422,200 in February 2020, which is still more than 39% lower than today’s price at $589,500. Upsizing buyers continued to explode some of Montreal’s suburbs, like those in Brossard, Laval, Longueuil, Lachine, LaSalle, St-Laurent and Verdun. You’ll notice that most of Montreal’s 7-digit home valuations are centred in and around the Outremont and Westmount.
Immigration & Out-of-province Migration
While the pandemic saw thousands of homebuyers leaving urban areas searching for more space and affordable housing, new immigrants are making Montreal homes a continued surge. Although many Quebeckers continue to leave Montreal due to housing affordability limitations, many continue to move here. According to this report by Re/Max, the federal government expects to bring an additional 2 million new immigrants to Canada – many of whom will still choose to settle in Toronto, Vancouver and Montreal.
Getting a mortgage in Montreal as a first-time buyer can be challenging for many. Montreal has some of the highest property tax rates for one of the big large cities compared to Toronto or Vancouver, with over 0.65% of property value. However, the location and tax rates are much more palatable compared to its suburbs of Brossard (0.70%), Longueuil (1%), Laval (0.85%) and Westmount (0.85%).
While programs like the First Time Home Buyer Incentive are in place to help people afford homes in Montreal, this has yet to do much to offset affordability as the stress test makes it harder to qualify. At the same time, the Bank of Canada keeps rates elevated – adding a barrier to qualifying for a home without a combined household income over $150,000.
Given the slowdown over the last 12 months in home prices, Montreal remains a difficult market to purchase a first home without outside financial assistance.
Montreal’s property market is set to remain strong as increases are expected for the remainder of 2023. The average home price in Montreal is recovering quicker than in other areas around Canada. However, this comes after months of record consecutive price rises during the pandemic and one of the most intense periods of price appreciation the city has ever seen.
While the property market appears to be recovering value in Montreal, it’s important to remember that some volatility should be expected over the long term. It’s always a good time to buy a property if you’re a qualified buyer. Over the long term, expect property values to keep surging as immigration brings more buyers to the Canadian market.
If you are looking for a home in 2023, expect an imminent turnaround in the housing market over the next few months. Contact our knowledgeable and commission-free mortgage experts at nesto to help guide you through the home-buying process.
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Market Rents Summary
The Canadian rental market experienced a record-breaking surge in August, with average rents soaring to an all-time high. This trend indicates a significant shift in the country’s rental landscape, with prices continuing to escalate despite increasing rental completions. Below, we delve into this trend with data from Rentals.ca and Urbanation, examining the changes across various provinces and cities.
National Overview: A Record-Breaking Surge
August witnessed a remarkable rise in the average asking rents in Canada. The average rent reached an all-time high of $2,117, marking a monthly increase of 1.8% and an impressive annual growth rate of 9.6%. This trend is a testament to the escalating demand in the rental market as the country struggles with a severe rental housing shortage.
Over the past three months, the Canadian rental market experienced a significant 5.1% increase in asking rents from May to August. This equates to an increase of $103 monthly, putting additional pressure on renters. Shaun Hildebrand, President of Urbanation, shed light on this trend, noting that unlike in the U.S., rent inflation in Canada has stayed the same, even with rental completions reaching their highest levels in decades. This gives an idea of the dire rental housing shortage across the country and the impact on rental demand as the population expands rapidly.
Quebec’s Rental Market: Steady Climb
In Quebec, the rental market is also experiencing a steady rise. The province, known for its rich culture and picturesque landscapes, has seen average asking rents grow by 24.0% annually to $888 monthly for shared units. The surge in rental prices in Quebec is mainly attributed to the robust demand for rental housing, driven by the province’s growing population and strong economy.
The Greater Montreal area, in particular, has seen a significant rent increase. Despite the city’s efforts to provide affordable housing, the average asking rents have surpassed the $2,000 mark for the first time, reaching $2,001. This has increased financial strain on renters, particularly those with lower incomes.
Ontario’s Rental Landscape: The Expensive Side of Living
Ontario, Canada’s most populous province, is familiar with high living costs, particularly in the rental market. The province saw an annual rent increase of 7.5% to an average of $1,040 for shared accommodations. This trend is particularly prevalent in the Greater Toronto Area (GTA), where the average monthly rent has reached $2,898.
Despite being one of the country’s most expensive cities, Toronto posted a below-average annual rent increase of 8.7%. Nevertheless, the cost of renting in Toronto remains high, while rental vacancies are at a two-decade low. This increasing unaffordability and low availability is a significant concern for many residents and employers looking to attract talent.
Alberta’s Rental Market: Leading in Growth
Alberta’s rental market has grown the fastest among Canada’s largest cities. Calgary, in particular, leads in rent growth, recording an enormous 17.3% year-on-year increase in August, bringing the average rent to $2,068 for purpose-built and condominium apartments.
Despite the economic challenges faced by the province due to the fluctuating oil and gas industry, Alberta’s rental market has remained resilient. The significant rent rise in Alberta is primarily due to the province’s steady rental demand, driven by its growing population and recovering economy.
British Columbia’s Rental Market: High Prices Amid High Mountains
British Columbia (BC), known for its stunning landscapes and high living costs, has also witnessed a considerable increase in rental prices. In BC, average asking rents for shared accommodations increased by 17.7% annually to $1,150 monthly.
Vancouver, BC’s largest city, continues to be the most expensive city in Canada, with an average monthly rent of $3,316. However, Vancouver posted a below-average annual rent increase of 7.3% and even saw a 0.7% decrease in average rents monthly. This indicates that the city’s rental market may be stabilizing, although the cost of renting remains high.
The Time to Purchase a Home is Now
In conclusion, the Canadian rental market has been experiencing an unprecedented price surge, with rents increasing faster than ever. This trend and the ongoing rental housing shortage have pressured renters nationwide.
Given these circumstances, it might be an opportune time to consider purchasing a home. Despite the high upfront costs, owning a home can offer long-term financial benefits and stability, especially in a market where rents are skyrocketing. Thus, starting planning and taking the necessary steps toward homeownership is vital. After all, a home is not just a place to live but also an investment for the future.
Rental Cost Escalation Due To Housing Affordability Constraints
This past month, CMHC released some quantified findings from their 2022 Rental Market Survey. Their experts indicated rental markets tightening in many urban centres and created two different measurements to show the lack of housing supply in the country. You can read the full report, while the data can be easily illustrated in two charts.
Share Of Affordable Units By Major Urban Centre
The first indicator measures the share of units that are affordable (whose rent represents less than 30% of pre-tax income) for the lowest income group of renters, those in the lowest income quintile (20%).
*Kitchener, Waterloo and Cambridge Source: CMHC
Change In Average Rent For A 2-Bedroom Unit
The second indicator allows us to measure the average rent for newly rented units, that is, apartments whose occupants arrived in the last 12 months. This new statistic is very relevant because it allows us to compare it with the average rent for units occupied for more than a year.
Source: Provincial governments, CMHC Rental Market Survey (2022)
Each $100K in mortgage balance costs an average of $601.11 per month on nesto’s lowest fixed 5-year rate at
Rental Prices Compared to Other Canadian Cities
Rental Prices Compared to Other Provinces and Nationally
Average Rents by Housing Type
Rental Growth by Housing Type
Frequently Asked Questions
Is the Montreal housing market going to crash in 2023?
Montreal home prices are currently sagging due to surging mortgage rates. Montreal prices remain below average compared to the rest of the country, and with the current Bank of Canada rate hikes, mortgages have been harder to qualify for due to the stress test. Montreal prices will recover quicker than in other areas once mortgage rates decline back to manageable levels for homebuyers to purchase or homeowners to refinance their homes.
Will Montreal’s housing prices increase in 2023?
Although currently declining, many experts believe that a turnaround is imminent. Buyers are waiting on the sidelines for the opportune time to make a move. The market has already started to get closer to becoming balanced.
How do I get approved for a mortgage in Montreal?
To get approved for a mortgage in Montreal, look at Montreal mortgage rates and see how much you can afford. This will give you an idea of what it will cost to buy a home in Montreal at today’s prices and rates. You can check out what you need to get pre-approved for a mortgage or start by getting a quote.
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