Average apartment rents in the Montreal region could rise by 27% over the next three years. A potential drop in interest rates and a slow recovery in construction in 2024 will not be enough to curb this increase, whether for rental or purchase, warns Canada Mortgage and Housing Corporation (CMHC).
In its forecast report published Thursday morning, CMHC indicates that the expected recovery in housing starts in the Montreal metropolitan area will be largely insufficient to meet the growing demand for housing. As a result, the rental market will remain under pressure, with vacancy rates reaching historically low levels and rents reaching new highs. In 2024, CMHC forecasts that the average rent for a two-bedroom apartment (a 4 and a half) in the Montreal census metropolitan area (CMA) will rise by 8.5% to $1190 per month, up from $1096 in 2023.
However, with vacancy rates continuing to fall, CMHC warns that, regardless of fluctuations in interest rates and construction, this upward trend in rents should continue. Average rents could reach $1290 per month in 2025 and $1390 per month in 2026.
Compared to 2023 ($1096/month), this represents an increase of $294/month (or $3528/year) over three years, or 27% for the Montreal region, including the Lower Laurentians and a large part of Montérégie.
No downturn in sight for houses and condos
Despite a slight upturn in residential construction in 2024 and renewed activity in the resale market, CMHC does not anticipate a drop in prices for future homeowners in the Montreal region, whether for single-family homes or condominiums. After increasing by more than 50% between 2019 and 2022, the average price of single-family homes has fallen by only 2% in 2023, according to CMHC.
All indications are that the expected drop in interest rates, in a context where new home construction remains limited, will stimulate demand in favor of sellers.
In 2023, the average price of a property was $600,501. In 2024, CMHC forecasts that it will vary between $606,200 and $637,900.
