Quebec’s Housing Market: A Very Active Spring with Signs of Slowing for the Second Half of the Year

Although Quebec’s housing market is still classified as a seller’s market, early signs of a slowdown are starting to emerge. Nevertheless, the Quebec market stands out for its strength and rising prices—unlike other Canadian provinces. Consumer confidence in Quebec is being shaken by instability in the job market, particularly in export-related industries tied to the U.S., dampening homebuyer momentum. Unless there’s a sudden shift in U.S. policy on tariffs for Canadian imports, Quebec’s economy is expected to continue slowing, bringing the housing market into balance by the end of 2025.

MLS (Multiple Listing Service) residential resales continued to slow in May compared to April (-0.5%), though activity remains higher than the same time last year (+9%). Meanwhile, active MLS listings are once again on a slow but steady rise. As expected, the increase in new listings in May (+10% compared to the same period last year) is boosting the supply of units on the market. Full-time private sector employment has seen a sharper decline, particularly among 25–44-year-olds. One trend to watch: the number of homes for sale due to mortgage repossessions. While not dramatic, the mortgage repossession rate is now comparable to pre-pandemic levels.

Driven by a still-resilient MLS resale market, the growth in average prices for existing units (+7.8%) remains higher than the 10-year average (+6%) and above the inflation rate (2%). Based on the sales and MLS listing outlook explained above, we maintain that price growth will likely remain in the range of 3.5% to 5.5% through the end of 2025—a sign of a market gradually returning to “balance.”

Greater Montreal Area: A Seller’s Market Driven by Unit Shortage

The MLS resale market in the Greater Montreal area currently favours sellers—not because of record-breaking sales activity, but due to a low number of units listed for sale. This situation is especially true for single-family homes compared to condominiums, allowing sellers to command prices that exceed the rate of inflation.

Pushed out—not by choice, but by the scarcity and reduced affordability of single-family homes—first-time buyers are turning to the condominium or rental markets.

While MLS sales have generally been on the rise since 2022, the supply of new units hasn’t kept pace with naturally growing demand. Once dominated by construction cranes building new condos, Montreal’s skyline is now more reflective of a surge in rental unit development.

Because the supply of both new and existing condos remains insufficient, the market for existing condominiums currently favours sellers—with average price increases of 4% to 6% annually since 2022.

Along the same lines, as purchasing a home becomes more expensive for first-time buyers—and even for some empty nesters—many are turning to the rental market by necessity.

At the same time, the supply of new condominium units has indirectly increased the availability of rental properties, as new real estate investors step in to meet the growing demand from new renter households who can afford these units. This new supply is being absorbed by incoming households, whether through international, interprovincial, or intraprovincial migration.

As a result, Montreal’s rental vacancy rate has fallen below 2%, signaling a housing shortage well below the 3%–4% balance threshold. This has led to average rent increases of nearly 7%–10% over the past 12 months.

Given the anticipated decline in homebuyer demand in the coming months, the rental market will likely remain undersupplied throughout 2025—supporting further rent increases, particularly for newly built rental condos.