Metro Montreal
Real Estate Trends and Price Forecast

HIGHLIGHTS

• Metro Montreal home values have been volatile since 2021, and are now trending upward.

• Unlike other Canadian cities, for this time of year, there is less supply in Montreal than in the two prior years. So there’s more upward pressure on prices. It remains to be seen how long Montreal can swim against the national tide of higher supply.

• Multi-factor analysis identifies Metro Montreal as a lower-risk real estate market.

• Mortgage rates have eased from their peak, but remain high relative to the 2010–2020 average, limiting buyer budgets.

• Economic uncertainty is rising due to Canada’s recent migration policy shift and the Trump administration’s tariffs, which could further weigh on the market.

This article covers:

1. What is the state of the Montreal real estate market?

2. Which way are prices going?

3. Should I sell?

4. Is now a wise time to purchase?

1. What is the state of the Montreal real estate market?

Overview of the Montreal Property Market

Metro Montreal is a sophisticated city of 4.3 million people that has earned recognition as one of the top 100 cities in the world, coming in at number 60. Many would say that, culturally, Montreal is the most European city in North America.

Montreal is a city that offers a unique and vibrant living experience with a blend of North American and European influences. Here's a breakdown of why it's considered a great place to live:

• Cultural Richness: Montreal is known for its diverse and multicultural population, leading to a rich tapestry of festivals, events, and cultural experiences.

• Vibrant Arts and Entertainment: Montreal has a thriving arts scene with numerous museums, galleries, and theaters. It's famous for its lively music scene and numerous festivals, including the Montreal International Jazz Festival.

• Foodie Paradise: The city boasts a diverse culinary scene, offering everything from traditional Quebecois dishes like poutine to international cuisine.

• Affordability: Compared to other major Canadian cities like Toronto or Vancouver, Montreal generally offers a more affordable cost of living, particularly in terms of housing.

• Walkability and Bike-Friendliness: The city is relatively easy to navigate, with walkable neighborhoods and an extensive network of bike paths.

• European Charm: The architecture and feel of many parts of Montreal give it a distinct European feel, making it unique in North America.

While Montreal experiences cold winters, the city's vibrant atmosphere and numerous amenities make it an attractive place to live.

Supply is at its lowest in three years – comparable to 2019 –but much higher than during the pandemic.

Metro Montreal Detached House Prices

Montreal house prices are exploring uncharted territory but may be losing steam. It is probably too early to make a call because prices typically soften between August and December.

We believe politicians hope to guide the market toward a typical annual real estate cycle with price growth of 1% to 3% annually— in line with income growth.

Montreal’s house prices stand out against the declining trend in other major Canadian cities like Vancouver and Toronto. Several factors contribute to this disparity:

1. Expectations of Limited Supply: Montreal construction is down significantly. In 2022, there were over 40,000 units under construction, and now the figure is closer to 30,000. This could lead investors to conclude that a future supply crunch will supercharge prices.

2. Steady Demand: Montreal attracts new residents due to its relatively affordable housing and good job opportunities. This consistent demand puts further pressure on the already constrained supply.

Overall, Montreal’s housing market presents a unique picture within the Canadian context. While external factors can influence it, understanding the local supply-demand dynamics, investor activity, and price comparisons is crucial for deciphering its trajectory.

Metro Montreal New Construction Home Prices

The prices of new homes appear to be rising in the short term. Long-term new and pre-sale prices have been relatively flat since 2022. Pre-sale buyers should avoid paying a premium.

Does this concern you? Read the Pros and Cons of Buying Pre-sale Homes

The softening demand for new homes has caused many developers to pause new releases, slowing the pace of new supply entering the Montreal market.

Market Risk

Mortgage Sandbox Analysis shows Montreal is at lower risk of a significant market correction.

Metro Montreal Condo Apartment Prices

Metro Montreal's benchmark apartment prices dipped in 2022 but have continued their upward trajectory.

Montreal apartment purchases have improved since 2023 but are lower than in 2022. Similar to the detached house market, condo apartment listings are growing.

With more people working from home or hybrid, we expect developers will begin marketing larger (i.e., 2 and 3 bedrooms) apartments to meet buyer preferences. As the supply of more generous floor plans comes to the market, it may depress the values for small floor plan condos.

At Mortgage Sandbox, we would like developers to build 4 and 5 bedroom condos because:

• Not everyone can afford to buy a house for their family.

• Canadians who work from home need more room to segregate workspace from living space.

• Many Canadians with longer working hours find it challenging to stay on top of necessary house upkeep (i.e., mowing lawns, clearing eaves, shovelling sidewalks).

• Many people prefer to live in higher-density neighbourhoods with all the essential amenities within walking distance.

Metro Montreal Townhouse Prices

Still a challenge for first-time homebuyers

A Montreal household earning $76,000 (the median Metro Montreal household before-tax income) can get a $260,000 mortgage. If they were to save a $65,000 down payment, they could only buy a home valued at $323,000. The Median condo apartment price is over $400,000, so for them to buy a typical condo apartment, a household needs an inheritance or a very generous gift from family. For most people, that is not possible.

What about the rest of Canada?

Read the Toronto Real Estate Forecast, Ottawa Forecast and the Metro Vancouver Forecast.

2. Which way are prices going?

There is a lot of uncertainty in the forecasts for looking out toward 2027. Many of the forecasters we've surveyed have different expectations for:

• Will the federal government’s recent migration policy pivot lead to a shrinking population?

• Will mortgage rates drop to the 2 to 3 percent range that Canadians have grown used to?

• Will Trump impose a 25% tariff on Canada, leading to a trade war and recession?

How do we arrive at our forecast range? Check out our full assessment of the five factors that drive these forecasts. These five forces help explain why several forecasters are anticipating price drops.

At Mortgage Sandbox, we provide a price range rather than attempting a single prediction because many real estate risks can impact prices. Risks are events that may or may not happen. As a result, we review various forecasts from leading lenders and real estate firms, and we then present the most optimistic estimates, the most pessimistic predictions, and the average forecast.

Would you like to learn more about real estate risk? We’ve written a comprehensive report explaining the uncertainty level in the Canadian real estate market.

Our forecast inputs:

• CMHC Housing Outlook

• Fitch Ratings Global Housing Forecast

• Reuters Housing Forecast Poll

• Royal LePage House Price Forecast

• RE/MAX Housing Market Outlook

• Canadian Real Estate Association Quarterly Forecast

• RBC Home Resale and Price Forecast

• TD Bank Economic Housing Outlook

• BMO Housing Outlook

3. Should I Sell?

From a seller’s perspective, the market is favourable – it’s a seller’s market. Also, the annual real estate cycle usually favours sellers in the first half of the year. If you plan to sell, now may be a better time to sell later, particularly because a U.S. trade war could derail the market.

Sellers should always consult a mortgage broker early to prioritize flexible loan conditions and reduce the risk of mortgage cancellation penalties. Find out more about the benefits of a mortgage broker.

Planning to Sell? Check out our Complete Home Seller’s Guide.

4. Is now a wise time to purchase property?

It’s hard to say. Mortgage rates are relatively high and falling. Also, the annual real estate cycle usually favours buyers in late summer and autumn. If you wait, home values might be higher, but your mortgage will likely be cheaper.

Also, the annual real estate cycle usually favours buyers in late summer.

If you are considering buying, drive a hard bargain and pay as close to market value as possible. Also, don’t bite off more than you can chew when it comes to financing.

Are you Planning to Buy? Check out our Complete Home Buyer’s Guide so we can walk you through the end-to-end process and get you ready to buy your new home!

Here are some recent headlines you might be interested in:

• Canada housing market unlikely to surge despite plunging interest rates (MPA | Mar 14)

• Millennials, gen Z in 'Goldilocks moment' to jump on Canada's property ladder (Financial Post | Mar 12)

• Bank of Canada cuts interest rate to 2.75% as country faces 'new crisis' from tariffs (CBC | Mar 12)

• Housing market faces “uncertainty” amid economic and geopolitical shifts: CMHC (REM | Feb 10)

• Montreal home sales jump 36 per cent in January as rate cuts entice buyers (City News | Feb 09)

• Montreal home sales jump 36 per cent in January as rate cuts entice buyers (CTV News | Feb 07)

• How a trade war and U.S. tariffs could hit Canada’s housing market (Global News | Jan 29)

• Canada doesn’t need bigger cities to solve the housing crisis, report finds — it needs more cities (The Toronto Star | Jan 21)

• Here’s how much Quebec rent prices will go up in 2025 (CTV News | Jan 21)

• Canadians' financial stress ramping up despite interest rate cuts: MNP (BNN Bloomberg | Jan 13)

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