Montreal housing market: prices and trends
Published on March 26, 2024
Many people are keeping a close eye on the Montreal housing market now that 2024 is in full swing. Will it be easier for buyers to acquire a property? Will it remain a sellers’ market? How interest rates evolve will shed a lot of light on these questions and determine the trends to watch in the coming months.
Here is what you need to know about housing activity, market conditions and Montreal housing prices.
Summary:
- Overview of the Montreal housing market
- Property price trends in Montreal
- Two factors influencing property prices
- Impact of the Bank of Canada’s key interest rate
- Local economy
- Montreal housing prices by property type
- Single-family homes
- Condominiums
- Plexes
- Montreal housing prices by neighbourhood
- Ahuntsic–Cartierville
- Anjou
- Côte-des-Neiges–Notre-Dame-de-Grâce
- Lachine
- LaSalle
- Plateau-Mont-Royal
- Sud-Ouest
- Mercier–Hochelaga-Maisonneuve
- Montréal-Nord
- Outremont
- Pierrefonds–Roxboro
- Rivière-des-Prairies–Pointe-aux-Trembles
- Rosemont–La Petite-Patrie
- Saint-Laurent
- Saint-Léonard
- Verdun–Nuns’-Island
- Ville-Marie
- Villeray–Saint-Michel–Parc-Extension
- How to buy a property in Montreal?
Overview of the Montreal housing market
Montreal keeps its status as an affordable Canadian city compared to other metropolitan areas like Toronto and Vancouver, and the market appears to be holding stable. However, demand continues to outpace supply in many neighbourhoods as residential construction experienced a sharp slowdown in the first six months of 2023.1
Desjardins expects housing prices and sales to remain relatively stable in the first half of 2024. The affordability factor remains a top challenge at this time given the housing supply shortage and high mortgage rates. Sales are expected to pick up slightly at mid-year with a helpful boost from some key rate cuts. Prices should also keep rising but we are not expecting any surge like we witnessed during the pandemic.
The municipal administration is throwing its support behind affordable housing construction. However, rising land and material costs combined with high interest rates are proving to be major stumbling blocks to achieving that goal. The housing shortage has resulted in increased rental prices, which in turn has pushed many renters to look into buying instead. Less expensive homes are often located in outlying areas so many potential buyers are considering the condo route as a way to stay centrally located.
“Given the current challenges, the Canada Mortgage and Housing Corporation's target of 3.5 million units by 2030 seems unrealistic to us. Securing new construction to match needs is also important. For example, building housing for students and retirees could free up existing housing for families,” stated Jimmy Jean, Vice President, Chief Economist and Strategist at Desjardins Group.
Property price trends in Montreal
The city is still popular among young professionals, students and immigrants. This sustained demand, combined with a low number of active listings,2 has put pressure on the market and encouraged prices to rise.
Government policies seem to have not had the desired impact, including measures aimed to curb real estate speculation. There has also been a limited impact noted as a result of the ban on non-Canadians buying real estate. It is worthwhile to note that the diversity of Montreal neighbourhoods plays a vital role in price variations. The highly sought after Plateau-Mont-Royal neighbourhood, known to be home to many local businesses, recorded an increase in sale prices.3
Two factors influencing property prices
1. Impact of the Bank of Canada’s key interest rate
The real estate market is affected by changes to the Bank of Canada's key interest rate. When the rate goes up, so do mortgage interest rates, and that makes it more expensive to borrow. An increased rate can lower demand and make it harder to get a loan, which slows down real estate activity. Conversely, lower mortgage rates result in more advantageous loans that encourage people to invest in real estate, which can lead to increased demand and higher prices.
Learn about current mortgage rates at Desjardins
In addition, the key interest rate influences the number of housing starts that get under way due to its impact on financing costs. Lower rates motivate property developers to borrow to fund projects and this stimulates construction activity. Low interest rates can boost investor confidence and create favourable economic conditions for residential construction.
The Bank of Canada’s key interest rate remained high throughout the year, rising from 4.5% in January 2023 to 5% in July 2023. We cannot underestimate the impact this has had on monthly budgets for mortgage payments. It has forced a significant number of potential homebuyers to shelve their plans and wait for the rate to drop.
Variations in key interest rate
The good news is many economists predict the key interest rate will drop by the end of 2024, which could cause a domino effect on interest rates to fall in the future. It is interesting to note that the Bank of Canada has not yet commented publicly about a looming interest rate cut. It is currently seeking further confirmation that inflation is indeed heading for 2%.
The Bank of Canada’s overnight rate should be standardized this spring. Desjardins expects the Bank of Canada to make five cuts of 0.25% each, which will drop the key interest rate from its current 5% to 3.75% by the end of the year. Interest rates will understandably be higher than the overnight rate but should generally follow this trend and that will help some households qualify to buy a property. However, prices will remain buoyant due to an underwhelming supply and that means the affordability factor will not see much improvement. A lower rate will incite a mild resurgence in housing starts but structural constraints will deprive the market of a full-fledged rebound.
“We believe the Bank of Canada key interest rate will start to fall around June. However, mortgage rates will not go down by a lot or that fast. Anyone renewing their mortgage should still expect high payments,” warns Mr. Jean.
2. Local economy
Property prices are also influenced by the local economy in Montreal. Factors like job growth and household income are major drivers of real estate demand. If the local economy is strong, it can stimulate housing demand and put upward pressure on prices.
Population growth can trigger increased housing demand, which can lead to higher house prices. Positive perceptions can encourage buying while economic uncertainty can have the opposite effect.
Montreal housing prices by property type
Here are statistics on property sales for the various types of residential property in the metropolitan area.
Single-family homes
The median price of single-family homes in Montreal increased throughout 2023. The median price was $656,500 from January to June 2023, compared to $725,000 for the last six months of the year.2 The volume of sales of single-family homes also rose, moving from 1,901 real estate transactions in the first half to 2,145 in the second.3
Condominiums
The median price of condominiums in Montreal remained stable. The median price was $441,226 from January to June 2023, compared to $442,000 for the last six months of the year.2 The volume of sales of condominiums, much higher than single-family homes, moved from 5,289 units in the first half to 5,348 in the second.3
Plexes
The median price of 2 to 5-unit income properties in Montreal rose throughout 2023. The median price was $750,000 from January to June 2023, compared to $770,000 for the last six months of the year.2 The volume of sales of plexes also increased, moving from 1,193 in the first half to 1,407 in the second.3
Montreal housing prices by neighbourhood
The price of Montreal properties varies widely depending on the neighbourhood. Prices in central areas tend to be higher due to the proximity to businesses, entertainment and metro stations. More affordable options can be found in outlying areas, reflecting the diversity of the Montreal housing market.
The following numbers are from the WOWA Montreal Housing Market Report database. All residential sales and active listings are included. Prices were obtained between October 1-December 31, 2023.
Ahuntsic–Cartierville
The median price was $799,000 for single-family homes (+8%), $359,000 for condos (-2%) and $817,500 (+2%) for plexes.4
Anjou
The median price was $605,000 for single-family homes (+ 2 %), $335,000 for condos (-3%) and $765,000 (-3%) for plexes.4
Côte-des-Neiges–Notre-Dame-de-Grâce
The median price was $1,125,000 for single-family homes (+25%), $450,000 for condos (-15%) and $832,000 (-11%) for plexes.4
Lachine
The median price was $666,000 for single-family homes (-4%), $389,000 for condos (-6%) and $650,000 (0%) for plexes.4
LaSalle
The median price was $637,000 for single-family homes (-4%), $402,000 for condos (-3%) and $780,000 (+6%) for plexes.4
Plateau-Mont-Royal
The median price was $1,219,000 for single-family homes (-7%), $555,000 for condos (+8%) and $1,175,000 (+32%) for plexes.4
Sud-Ouest
The median price was $875,000 for single-family homes (+8%), $480,000 for condos (+8%) and $745,500 (-6%) for plexes.4
Mercier–Hochelaga-Maisonneuve
The median price was $545,000 for single-family homes (-7%), $365,000 for condos (-4%) and $677,500 (-4%) for plexes.4
Montréal-Nord
The median price was $480,000 for single-family homes (+4%), $326,000 for condos (0%) and $642,500 (-3%) for plexes.4
Outremont
The median price was $2,245,000 for single-family homes (+7%) and $710,000 (-3%) for condos.4
Pierrefonds–Roxboro
The median price was $585,000 for single-family homes (+2%) and $370,000 (-2%) for condos.4
Rivières-des-Prairies–Pointe-aux-Trembles
The median price was $494,000 for single-family homes (+8%), $300,750 for condos (-2%) and $646,000 (-1%) for plexes.4
Rosemont–La Petite-Patrie
The median price was $880,000 for single-family homes (+3%), $509,000 for condos (+8%) and $812,500 (-1%) plexes.4
Saint-Laurent
The median price was $740,000 for single-family homes (-3%), $467,000 for condos (+8%) and $806,500 (-6%) for plexes.4
Saint-Léonard
The median price was $615,000 for single-family homes (-12%), $385,000 for condos (-4%) and $880,000 (-5%) for plexes.4
Verdun–Nuns’-Island
The median price was $957,000 for single-family homes (-5%), $557,000 for condos (+1%) and $814,500 (-5%) for plexes.4
Ville-Marie
The median price was $1,200,000 for single-family homes (-2%), $460,000 for condos (-5%) and $793,000 (-10%) for plexes.4
Villeray–Saint-Michel–Parc-Extension
The median price was $585,000 for single-family homes (-4%), $475,000 for condos (+3%) and $793,000 (+5%) for plexes.4
How to buy a property in Montreal?
A lot of homes, condominiums and plexes in Montreal are listed on the DuProprio website. Search filters allow you to find properties that match your criteria (location, price, etc.). It is then possible to communicate directly with sellers, visit properties that interest you and negotiate a purchase price and conditions without a broker.
The Montreal housing market should be stable in 2024, although a lot of uncertainty still remains. Interest rate changes and future political decisions will influence this unique market and could work in favour of potential buyers.
Did you know? You can look for properties to buy and to sell on the DuProprio website! And if you need to sell before buying, our professional team can give you the visibility you need to get the sale done. Watch our information video or schedule a consultation with a member of our team to find out more about our services.
