Montréal 2025 real estate market forecasts

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Montréal 2025 real estate market forecasts

Key information:
1. Overview of 2024: The year 2024 was marked by strong activity on the Montreal real estate market, with a 10-12% increase in sales, despite limited supply.

2. The Montreal real estate market should continue to grow in 2025, with sales expected to increase by between 10 and 12%, supported by lower interest rates and mortgage reforms.

3. Property prices should rise by 5-7%, fuelled by limited supply and strong demand.

4. Rising rents will drive more and more renters to buy, especially in the affordable condo and plex segment.

5. Property investors should return to the market, attracted by improved rental yields following the rise in rents, and more advantageous financing conditions.

6. Sellers need to be strategic, relying on realistic pricing, effective marketing and flexible negotiation to optimize their deal.

7. The key factors influencing the market in 2025 will be the policy rate, inflation, inventory, mortgage reforms and U.S. economic policies.

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As 2025 gets underway with sustained activity, one question keeps coming up: “What will the real estate market look like this year?”

In Montreal, as elsewhere, real estate continues to evolve in an environment marked by economic fluctuations, monetary and government policies, and demand driven by the city’s attractiveness.

After a year of rising sales and prices in 2024, 2025 promises to bring its share of opportunities and challenges for buyers and sellers alike.

In this article, we take a look at the main trends in the Montreal real estate market this year. From the effects of mortgage reforms to changing property prices, rising rents and falling interest rates, find out how to anticipate market trends and optimize your real estate decisions, whether you’re looking for a new home or ready to sell.

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  1. Montréal 2024 real estate market: Analysis and trends

  2. Challenges and factors to watch out for in 2025

  3. Montréal real estate market 2025: Outlook and forecasts

Montréal 2024 real estate market: Analysis and trends

The year 2024 was marked by strong activity on the Montreal real estate market, with a rise in sales of between 10 and 12% depending on the neighborhood, paralleled by a roughly similar rise in prices. Whether you live in the heart of the city or on the outskirts, this upward trend was visible across most sectors. What were the key factors behind this dynamism?

Resilient demand despite economic and political uncertainties

Montreal buyers were not deterred by economic uncertainties and still relatively high interest rates in the first part of the year.


In search of asset stability, they maintained sustained demand throughout the year. This pressure has led to an increase in sales, but also in prices in most sectors, particularly those offering well-located properties or those with strong potential for value enhancement.

While uncertainty was the order of the day in the first half of the year, the easing of mortgage rules and lower interest rates played a major role in boosting confidence among buyers, who saw their interest in property investment intensify as the year progressed.

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Limited supply fuels competition


In parallel with this sustained demand, buyers may have been penalized by limited supply.

Despite the government’s efforts, the low level of new construction and the limited number of properties available for sale have pushed up the value of existing properties, steering the market towards a balance of power in favor of sellers in 2024, a trend that is set to continue into 2025 as new mortgage reforms take effect, interest rates fall and rents for tenants rise historically.

Challenges and factors to watch out for in 2025

As 2024 draws to a close, several key factors should continue to influence the Montreal real estate market in 2025. These issues could play a decisive role for buyers, sellers and investors, and are worth keeping a close eye on:

Effects of mortgage reforms

One of the critical issues for the real estate market in 2025 will be the effects of mortgage reforms.

Following the announcement of lower rates, which are set to continue into 2025, financial institutions will be adjusting their service offerings to facilitate the borrowing capacity of buyers, particularly first-time buyers, in order to meet market conditions and support demand.

This improved affordability, fueled by mortgage reforms, will make it possible to borrow over 30 years with a down payment of just 5% for properties worth less than $500,000, and 10% for all types of property (single-family homes, triplexes, etc.) above that amount. These announcements will have a direct impact on demand and market competitiveness.

Inflation and interest rates

Inflation and interest rates remain crucial variables in the real estate market.

Although the outlook is tending towards stabilization, economic uncertainty about inflation could keep pressure on mortgage rates. Indeed, a rise in inflation would inevitably lead to tighter lending conditions and higher interest rates, which would dampen buyer confidence.

The link between inflation and central bank decisions will be closely monitored to forecast market trends.

This Wednesday, January 29, 2025, the Bank of Canada reduced its key rate to 3%, encouraged by encouraging statistics on inflation, which remains below the 2% target at the end of 2024.

Le Devoir

Limited inventory

The limited number of new constructions and homes on the market will continue to exert pressure on prices. This scarcity of supply will foster a competitive environment, where buyers will have to be quick to secure a property.

However, if inventory were to increase, notably as a result of rising rents, this could rebalance the supply/demand ratio. Some rental property owners may choose to sell, taking advantage of a more attractive market to sell their properties to investors or first-time buyers.

However, this possible increase in supply is counterbalanced by another trend: baby-boomers staying in their family homes. In Montreal, many “nesters” (parents whose children have left home) keep their property, often fully or almost fully paid for. Faced with the additional costs associated with a move – condominium fees, increased taxes and new rules affecting condominiums – many choose to stay in their home rather than opt for a new property.

This retention of properties by baby-boomers naturally slows inventory renewal and limits buyers’ access to well-located single-family homes. This market inertia thus contributes to maintaining an imbalance between supply and demand, reinforcing competition for available properties and exerting upward pressure on prices.

Geopolitics and the American economy

Geopolitical relations, particularly with the United States, will remain a determining factor for the Canadian economy, and by extension, the real estate market.

U.S. economic decisions, whether on interest rates, economic reforms or future presidential elections, will have a direct impact on the Canadian dollar, access to credit and investment.

So, if the U.S. government imposes high tariffs on Canadian suppliers, creating a hardship on our economy, the Bank of Canada will be forced to cut rates more than expected. With this in mind, the real estate market could outperform the rest of the Canadian economy due to the simple laws of supply and demand. Many buyers who stayed on the sidelines during 2022, 2023 and 2024, hoping for lower interest rates, may now be making a strong comeback to the market. With rents rising by more than 10% over the past 2 years and mortgage rates falling, 2025 will be the ideal year to take action and buy.

Kyle blog

“Barring a major market catastrophe, I foresee a growing market in 2025. Mortgage adjustments and interest rates will play a key role, but demand and competitiveness will remain strong in Montreal.”

Kyle Shapcott, leader in real estate

Montreal real estate market 2025: Outlook and forecasts

While 2025 is well and truly upon us, a number of trends observed in 2024 are set to continue and even intensify. What are the prospects for 2025, and how can you prepare as a buyer or seller?

Montreal real estate market forecasts for 2025

Montréal real estate market: Growth expected

The real estate market in 2025 will continue to grow, while maintaining a certain stability and competitiveness. Lower interest rates are expected to generate strong growth in sales and median prices, as well as shorter time-to-market, due to the prevailing buying power.

The boom in demand, coupled with lower interest rates and the implementation of mortgage reforms, will stimulate the market. However, this acceleration in demand will have to contend with a housing supply that remains limited, at least in the first half of the year, creating constant upward pressure on prices.

Montreal’s central districts and the metropolis as a whole will continue to be in high demand, while the suburbs will also see strong activity thanks to improved affordability and the effects of rising rents.

Given current and future conditions, we can easily anticipate continued sales growth in 2025, which should be similar to or even higher than that of 2024 (10 to 12%). If the inventory on the market increases and inflation remains at an encouraging level, we could be looking at one of the years with the greatest growth in the real estate market since the pandemic period. With access to mortgages becoming more flexible for buyers at the current rate of 3%, we can also expect sales prices to rise by 5% to 7% on the market, supported by the economic conditions mentioned above.

For buyers and sellers alike, it will be crucial to act quickly and strategically.

Discover our price map for different areas of Montreal
(Data taken from the latest APCIQ residential barometer)

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Effects of rising rents

The rent increase applicable in 2025 is not limited to tenants and homeowners. It should also have an impact on the Montreal real estate market, influencing residential choices and investment strategies.

Tenants between relocation and home ownership

With an increase of almost 10% in two years, the financial pressure on tenants is intensifying. Faced with this situation, two trends are emerging: some will absorb the increase by staying in rented accommodation, while others will consider buying a property to stabilize their spending.

At the same time, the gradual fall in interest rates is reinforcing this dynamic, bringing the cost of a mortgage closer to that of a monthly rent. This reality will prompt many households to compare the two options and consider buying as a more viable alternative, especially for first-time buyers.

At the same time, tenants are likely to move to more affordable neighborhoods, particularly on the outskirts or in the suburbs. Developing areas are particularly attractive to new arrivals, offering more affordable housing with good long-term value potential.

We therefore expect strong demand for entry-level condos on the Montreal market, to meet this demand from first-time buyers who will be looking to become homeowners after giving up renting.

Investors return to the rental market

Rising rents and falling interest rates are creating a more attractive environment for real estate investors. Plexes and small rental properties will once again become strategic investments, their profitability enhanced by higher rents and lower financing costs.

Until recently, rising interest rates had slowed investment in rental property. But with this more favorable context, buyers and investors are likely to return to the market, looking to acquire properties offering a good balance between cost and rental yield. Duplexes, triplexes and fourplexes will be particularly sought-after by owner-occupiers looking to make a profit on their acquisition.

Increased sales of rental properties

Finally, pressure on rents will also lead to an increase in supply on the resale market. Some owners, anticipating tenant departures or seeking to capitalize on rising prices, will choose to sell their rental property.

The influx of renters into property and the return of investors looking to reposition themselves will fuel demand, particularly for plexes and affordable condos. This dynamic could stabilize prices despite this increase in inventory.

In short, rising rents in 2025 will redefine the Montreal real estate market: more households will be looking to buy, investors should come back in force, and owners will have to arbitrate between adapting to the rise and facing the risk of rental vacancies, or selling their property after having amortized it in recent years to maximize their opportunities.

To understand the effects of rising rents on the real estate market, read our article on the subject.

Tips for buyers on the Montreal real estate market in 2025

As noted above, the market should continue to grow in 2025, supported by dynamic demand.

Even if lower mortgage rates are expected, the supply of housing will remain limited, increasing competition between buyers.

To maximize your chances of purchase and secure a good investment, here are a few strategies to adopt:

  1. Act quickly and be well prepared

    With sustained demand and the scarcity of available properties, it’s crucial to have a mortgage pre-approval in hand before you start your search. This will enable you to react quickly when an opportunity arises.
  2. Take advantage of falling interest rates

    With the key interest rate on the decline, financial institutions are offering more attractive terms. Compare offers from different banks and negotiate your mortgage rate to maximize your borrowing capacity.
  3. Targeting developing neighborhoods

    Neighborhoods in the midst of transformation often offer greater value-added potential. If you’re flexible about location, explore areas where prices are still affordable, but demand is growing fast.
  4. Consider properties with rental income

    With rents on the rise, buying a duplex, triplex or property with an additional apartment can be an excellent strategy for reducing the cost of your mortgage and generating additional income.
  5. Be flexible in your criteria and offer

    In a competitive market, it’s sometimes necessary to adapt your requirements to avoid losing a good opportunity. Work with an experienced broker who can guide you in your choices and optimize your purchase offer.

Tips for sellers on the Montreal real estate market in 2025


In a market where prices continue to rise but competition between sellers could intensify, it’s essential to position your property well to attract serious buyers and maximize your sale. Here are a few key tips to optimize your chances of selling quickly and at the best price:

  1. Set a realistic and competitive price

    With buyers more attentive to comparables and market trends, it’s essential to set a price in line with recent sales to avoid your property stagnating on the market.
  2. Enhancing the value of your property

    Simple home staging (fresh paint, space enhancement, natural light) can make a huge difference. A polished presentation will attract more buyers and maximize bids.
  3. Effective marketing

    Buyers search primarily online. Make sure your ad comes with professional photos, an engaging description and maximum visibility on real estate platforms.
  4. Flexibility in negotiation

    With the market evolving so rapidly, it’s best to remain open to offers and conditions from buyers to close a deal quickly and avoid a potential buyer turning to another property.
  5. Choosing the right time to sell

    With lower interest rates and rising demand, the first half of 2025 could be the ideal time to put your property up for sale and maximize your asking price before the market stabilizes.

In 2025, success for sellers is based on a strategic approach to pricing and reactivity to market opportunities.

Conclusion

The year 2025 promises to be an important turning point for the Montreal real estate market. With demand still strong, mortgage rates falling and housing supply limited, competition between buyers will remain intense. Rising rents are also pushing many renters towards home ownership, while investors will gradually return to the rental market, attracted by more attractive yields.

For buyers, the challenge will be to act quickly and strategically to secure a property before prices rise further. Good financial preparation and flexibility in search criteria are essential.

Sellers, for their part, will need to adopt a considered approach, focusing on competitive pricing and effective marketing to maximize their transaction. With rising demand and a dynamic market, opportunities will abound, but the key to success will lie in anticipating trends and a well-defined sales strategy.

In short, whether you’re buying, selling or investing, 2025 will be a year of opportunities to seize. To help you navigate this fast-changing market and make informed decisions, enlist the support of industry experts.

To anticipate these trends and support you in your real estate projects, our team of real estate brokers in Montreal is at your disposal. Contact us for an assessment, personalized advice or simply to discuss your needs.

Don’t let opportunities slip through your fingers, get ready now to take advantage of the real estate market in 2025!

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    Kyle Shapcott

    kyle@equipels.com

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    Kyle has been an expert in the real estate market for over 10 years. Passionate about Montreal and its real estate sector, he regularly shares his analysis and advice in his articles.

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