Montreal is a thriving real estate market. Total sales are up 30.66 per cent month over month in March with single family dwellings having the largest increase at 31.49 per cent1. Coupled with price increases of five per cent on single family and three per cent on condos year over year2, Montreal is a prime seller’s market. The market is seeing investors from Toronto moving to Montreal, along with Ottawa, to invest in new builds and properties. This growth is expected to continue. Potentially adding to the strength of the market is the current decrease in mortgage rates this first quarter, which will increase affordability and boost buyer traffic. The downward movement of listing inventory at 15 per cent year over year3 will also potentially lead to price increases and/or multiple offers on current listings as per supply and demand. Buyers and sellers should keep an eye on inventory and absorption levels in the near future to prepare for the latter months of 2019.
Factors that are keeping the market thriving and will add to buyer demand in 2019:
- Changing perception of Montreal, political stability and lower living costs could be key drivers heading into 2019.
- Sales to listing ratios have increased. Low listing supply will increase prices.
- Growth of tech, tourism and shipping industries. United States-Mexico-Canada Agreement deal is now in effect.
- The rental market is slim. The vacancy rate is around 1.9 per cent with rental rates increasing 2.2 per cent4.
Most expensive prime location: Downtown Montreal
Being the number one prime luxury location, Downtown Montreal draws in many young professionals and retirees. High net worth individuals, international buyers and students attending university are attracted to the lively area’s abundance of amenities and walkability. Downtown is the central business district to the city and is home to rich entertainment, tech and food options. Desirable properties in this area include condominiums, penthouses, townhouses and a small selection of detached homes.
Second most expensive prime location: Westmount and Outremont & Ville Mont-Royal
Families are attracted to this location for its close proximity to the downtown core, dense job market and high-ranking universities. The suburban neighbourhoods consist of historic properties with stunning architecture, large lots, green space, and nearby parks, schools and commercial streets. Luxury properties in this market tend to boast larger square footage.
Third most expensive prime location: West Island, waterfront
Consisting predominantly of English speakers, West Island attracts buyers as it is nearby many respectable private and top ranking public schools. There is an increase of families seeking out property in the West Island, especially from overseas like China.
Engel & Völkers Highest Listing Property: 4299 Av. Montrose in Westmount at $7.9 million
Space for new construction is limited as Montreal is an island; therefore, property prices are on the rise. Despite this, strong local and international buyer demand persists.
Similar to last year, Montreal remains a seller’s market in these aforementioned prime locations. Montreal’s real estate market begins its busy season in the beginning of January, running with continued momentum throughout the year. This summer, it is predicted the market will continue its growth momentum. Montreal’s largest group of international buyers derive from French-speaking countries (1), China (2), and the United States (3). Buyer and seller trends remain relatively the same as last year with a strong desire for luxury smart home technologies and contemporary builds. With increasing prices, we are seeing homeowners make investments in upgrading their homes in architecture and design to keep their properties competitive in the marketplace.
In consideration of emerging secondary housing markets, Griffintown, South West ( Le Sud-Ouest) and the upcoming RoyalMount project, which is set to be built at the junction of Highways 15 and 40, are the next hotspots buyers should look out for.
Secondary housing for investment and recreational purposes are popular in Montreal, especially in waterfront and large ski resort locations. Many resorts located in the south will need to increasingly diversify their warm-weather activity offerings to safeguard from foreseeably shorter ski seasons and lack of snowfall. The Eastern Townships’ ski area could reduce between 20 to 30 per cent by 2050 due to a decrease in snowfall, but can still be enjoyed for other activities5. The Mont Tremblant market in the Laurentians stands as an exception with its impressive mountain and high-end properties. There are international buyers seeking out properties with a large portion of land (1,000+ acres) with the intent to eventually transfer to their children.
As of now, the foreign buyers tax does not apply to the Montreal market. However, Mayor Valérie Plante, may propose and implement a foreign buyers tax policy. While the mortgage stress test may be affecting first-home buyers, it is inapplicable to ultra high net worth individuals. Montreal is seeing a trend of first-time buyers turning to parents for financial assistance with down payments and mortgage approval as a result of government regulations.
Tax and regulation predictions that may affect Montreal’s 2019 market:
- The municipal government may be tempted to call on the province and implement the 15% foreign buyers tax, similar to Vancouver and Toronto. However, this tax seems unfitting to the Montreal market because international buyers wish to move to Montreal, not only to invest in or reallocate money from their own country, but to live long-term.
1 QPAREB - Quebec Professional Association of Real Estate Brokers, February & March 2019
2 QPAREB - Quebec Professional Association of Real Estate Brokers, March 2019
3 QPAREB - Quebec Professional Association of Real Estate Brokers, March 2019
4 CMHC - Canada Mortgage and Housing Corp Year End 2018 Rental Market Report
5 Gosselin, J. (2019, February 25). Le domaine skiable des Cantons-de-l'Est en baisse de 20 à 30% d'ici 2050 | Janie Gosselin | Climat. Retrieved from