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What’s happening to Montreal’s downtown condo market?
Although it may be faring better than Toronto, the downtown Montreal condo market is facing headwinds.
The median price of a condo jumped 3 per cent on the island in the past year, but it’s fueled mostly by sales in the suburbs.
The downtown market is much slower.
“One developer was telling me as a joke that his biggest competition in the new condo market was not other developers, but it was a condo he built five years ago,” Francis Cortellino, an economist with the Canada Mortgage and Housing Corporation, said.
Recent numbers from the CMHC show just how tough the downtown condo market is. The CMHC says 25 per cent of recently built condos in downtown and Griffintown would now sell at a loss.
If the owner decides to rent it out, the CMHC says the majority of landlords would not cover their expenses.
“If you take into account monthly mortgage payments, insurance, taxes, condo fees, the rent that you’re asking on the market would not be able to cover those losses,” Cortellino said.
Real estate broker Amy Assaad says there are a number of reasons for that, one of them is the ban on foreign investors.
“The people who were buying these types of properties were investors, and we don’t have these investors anymore, and that’s what’s affecting the market,” Assaad said.
Not to mention oversupply, with a lot of units looking exactly the same.
“You’re competing with thousands and thousands of units that are on the market at the same time,” Assaad said.
According to the CMHC, Montreal faces many of the same challenges as Toronto, but the impact is different.
“The volume of condos in Toronto is way higher than Montreal,” Cortellino said. “I would say there’s investors in Montreal for the condo market, but that market is way larger in Toronto.”
For Montreal, it results in a lot of downtown condos sitting on the market.
Assaad says bigger units with more than one bedroom and more than one bathroom that also include parking tend to have higher resale value.
“A condo that was selling 10 years ago is selling for less sometimes than what the person paid for it,” Assaad said. “Whereas a single-family home downtown Montreal has tripled in value.”
Over half of Canadian homeowners fear mortgage renewals could impact their living situation
Over half of Canadian homeowners fear mortgage renewals could impact their living situation
TD survey spotlights growing borrower unrest as higher payments loom
As interest rates remain above pre-2022 levels, many Canadian homeowners preparing for mortgage renewals are anticipating financial adjustments.
A recent TD Bank Group survey reveals that 45% of those set to renew within the next year expect their monthly mortgage payments to increase.
Although the Bank of Canada recently held its overnight rate steady at 2.75%, borrowing costs remain elevated. This continues to influence homeowner behaviour, with 57% of survey respondents saying their renewal could affect their living situation. Among those, 73% are preparing to reduce discretionary spending.
TD’s survey, conducted April 10–18, included responses from 890 homeowners. Nearly one-quarter indicated they are reassessing their overall financial strategies in light of upcoming renewals. Of those, 43% said they would postpone home renovations, 29% are considering downsizing or relocating to more affordable areas, and 15% are open to either moving to a different neighbourhood or living with a roommate to reduce housing costs.
TD vice president of product management Patrick Smith said most renewing borrowers—75%—are opting for fixed-rate mortgages, citing stability in repayment amounts as a key factor.
The pressure of renewals aligns with Royal LePage’s February projection that 1.2 million Canadian mortgages will mature in 2024. The volume of renewals, combined with relatively high interest rates, is prompting changes not only in how existing homeowners manage finances but also in how prospective buyers approach homeownership.
In a separate TD Bank survey of 881 individuals looking to purchase a home, more than half reported cutting back on non-essential spending to save for a down payment or other costs associated with buying a home.
Additionally, 31% of prospective buyers are considering liquidating existing assets—such as tax-free savings accounts, registered retirement savings plans, or first-time home savings accounts—to fund a purchase.
While some markets have seen declines in home prices, the overall environment remains shaped by higher financing costs and economic uncertainty. These factors continue to influence housing choices, from renewal decisions to strategies for entering the market.
Here’s what Montrealers will be paying more for in 2025
Consumer price increases are slowing, but Montrealers will still feel the pinch of inflation in several different areas in 2025 — including at the grocery store and restaurants, and perhaps on their next flight. Bus and métro rates aren’t going up, but drivers will feel the hit as Montreal hikes vehicle registration fees to fund public transit. And electricity rates will be adjusted upward as of April 1.
On the bright side, Quebec pension payments are going up by 2.6 per cent and several employers plan to raise wages more quickly than the expected inflation rate. For those in the market to buy a house, the Bank of Canada reduced its policy rate repeatedly last year. The string of cuts are expected to spur home sales, but also increase the costs of homes. Inflation and borrowing Quebec’s annual inflation rate moderated to 1.6 per cent in October, compared with 4.2 per cent a year earlier, Quebec’s Finance Ministry reported, so inflationary pressures have reduced considerably. Most experts are predicting the inflation rate will decrease to two per cent in 2025 in Quebec and Canada. The Bank of Canada lowered its key interest rate by half a percentage point in December, but signalled a slower pace of rate cuts moving forward. The decision marked the fifth consecutive reduction since June and brings the central bank’s key rate down to 3.25 per cent. Forecasters were predicting the large cut after the November labour force survey showed the unemployment rate rose to 6.8 per cent. The Bank of Canada dropped its policy rate by 50 basis points in late October. Analysts were predicting rates would fall to 2.75 by mid-2025, potentially spurring an uptick in house sales.
Overall food prices are expected to climb by between three per cent and five per cent next year, according to the Canada’s Food Price Report, a document produced annually by Dalhousie University, the University of Guelph, the University of Saskatchewan and the University of British Columbia.
A Canadian family of four can expect to spend $16,833.67 on food in 2025, a more than $800 increase. Some food categories are expected to rise faster than others. Meat prices could rise four to six per cent in 2025, due in part to record high beef prices. Years of drought in the West mean cattle herds have been shrinking, driving up prices. Canada’s total cattle herd was the smallest it’s been since 1987, with an even more dramatic decline in the U.S. Higher feed costs and inflation have also contributed. The price of vegetables is expected to rise between three and five per cent next year. The Canadian dollar has been on the decline compared with the U.S. dollar, which makes imported foods more expensive, and this is likely to continue. Restaurant prices are expected to rise three to five per cent, as owners grapple with higher insurance and labour costs as well as interest rates. Bakery prices are set to rise two to four per cent, as are dairy prices. Vehicle registration Registration tax on passenger vehicles in the Greater Montreal area will increase from $59 to $150 this year to better fund public transit, the Communauté métropolitaine de Montréal (CMM) announced last May. The change comes as the Greater Montreal area grapples with a public transit funding deficit that the city of Montreal recently projected will worsen over the next few years amid rising costs. Flying with Air Canada Air Canada plans to bar carry-on bags and impose a seat selection fee for its lowest-fare customers, mirroring discount carrier tactics. Starting Jan. 3, basic fare passengers on trips within North America and to sun destinations will have to check duffel bags, rolling suitcases and large backpacks for a fee — $35 for the first, $50 for the second. The country’s largest airline said that as of Jan. 21, lower-tier customers will have to pay if they want to change the seat assigned to them at check-in. Municipal taxes
The Montreal budget, presented in late November, proposes an average property tax bill of $4,995 for homeowners. A 2.2 per cent increase in taxes means the average single-family home in the city, now valued at roughly $720,000, would see a tax rise of about $135. Increases by borough for residential properties range from 0.2 per cent in Ville-Marie to 3.4 per cent for L’Île-Bizard—Ste-Geneviève and 4.6 per cent in Pierrefonds-Roxboro. Less money for older adults who don’t retire As of Jan. 1, Quebec is increasing — to 65 from 60 — the age of eligibility for a tax credit for working later in life, a decision that is expected to save Quebec $877 million in spending over five years but cost 194,683 Quebecers about $973 a year in credits. The credit was created in 2011 with the intention of closing the gap with other provinces that had similar credits for workers, Finance Minister Eric Girard explained in November, saying the gap has now all but closed. Quebecers are also retiring later in life, making the incentive unnecessary, he said. The average retirement age in 2011 was 61.3. Today, it is 64.7 years.
Quebec pensions Several Quebec pensions will increase by 2.6 per cent starting in January, Retraite Québec announced in November. The average retirement pension paid at age 65, which is currently $682 per month, will increase to $700 per month. The average retirement pension paid at age 72, which is currently $1,083, will increase to $1,111 per month in 2025. And those who claim their retirement pension from the age of 60 will see it increase from an average of $457 per month to $469. Pensions paid by social security are indexed in January each year, according to the rate determined using the consumer price index. Home prices After three consecutive years of November sales declines, the number of homes sold in the Montreal area rose 47 per cent last November compared with a year ago. The Quebec Professional Association of Real Estate Brokers said 3,897 homes changed hands in the region in November 2024, up from 2,651 in November 2023. Meanwhile, the median price for all housing types in the region was up year-over-year, led by an 11.2 per cent increase in the price of a single-family home to $600,000, followed by a 7.6 per cent rise for condominiums to $425,000 and a 5.3 per cent gain for plexes to $770,000.
The price of a new home in Quebec is expected to rise by seven per cent in 2025 over the previous year, to an average of $557,595, the Canadian Real Estate Association (CREA) predicted in the fall. Lower interest rates are expected to spur buyers who had been been holding off to jump into the market. The CREA was forecasting sales to remain in a holding pattern until the spring, when a sharper rebound is expected. Quebec’s seven per cent increase is above the national average of 4.4 forecast for 2025, and far above British Columbia’s expected rise in prices (1.3 per cent), where the average house price is projected at $991,360 or Ontario’s (2.4 per cent), where the average house price is expected to rise to $877,546. Sales activity is expected to increase by 4.7 per cent in Quebec, below the national average of 6.6 per cent. Tax brackets Tax bracket thresholds are going up by 2.85 per cent next year, as is the amount at which citizens start to pay income tax. This means a bigger share of every Quebec taxpayer’s income will be taxed at a lower rate, resulting in savings of hundreds of dollars for some wage earners. As of Jan. 1, the basic personal amount that is exempted from taxation in Quebec will increase to $18,571 from $18,056.
What’s more, the maximum threshold for the first taxable income bracket — taxed at 14 per cent — will rise to $53,255 from $51,780. Salary increases Quebec employers plan to grant salary increases of 3.3 per cent next year across all occupations, according to a forecast released this fall by the Ordre des conseillers en ressources humaines agréés. That is half a percentage point less than what employers granted in 2024 (3.7 per cent, according to respondents to Statistics Canada), but is half a percentage point higher than the average before the COVID-19 pandemic.
Montreal home sales surge 47 per cent in November
Royal LePage forecasts home prices in Greater Montreal will rise by 6.5% in 2025 and 11% in Quebec City.
Montreal’s real-estate market is experiencing a surge, with experts predicting further price increases in 2025.
Residential sales jumped 47 per cent in November compared with the same month last year, marking the second-largest increase for November since 2000, according to the Quebec Professional Association of Real Estate Brokers (QPAREB). The rise follows October’s home sales rising around 44 per cent compared with the same month last year.
The association attributed the boost to strong performances in plexes, which rose 61 per cent, single-family homes, up 49 per cent, and condominiums, seeing a 41-per-cent rise.
Despite only a modest increase in property listings, demand continues to outstrip supply, pushing prices higher.
Looking ahead, Royal LePage forecasts home prices across Quebec to rise in 2025 by seven per cent, with Greater Montreal projected to see a 6.5-per-cent increase and Quebec City an 11-per-cent jump.
Royal LePage, which provides services to around 20,000 real-estate professionals across Canada, said the expected growth is due to ongoing demand, limited inventory and overall economic resilience.
This forecast follows a year of four consecutive interest-rate cuts by the Bank of Canada, which have made it easier for buyers to afford homes. The market also faces increasing geopolitical uncertainty, with U.S. president-elect Donald Trump threatening a trade war.
“While Quebec continues to demonstrate great economic resilience, trade issues with the U.S. and the 2025 Canadian federal election could introduce some volatility,” said Dominic St-Pierre, executive vice-president of Royal LePage.
“Talk of possible tariff increases by the new Trump administration raises questions, but we believe that hasty action would be unlikely, given the economic interdependence between the two countries,” he said.