Gloomy Montreal Rental Forecast Still Sunnier Than GTA Market Climate
For most renters, trends in the Montreal real estate market are heading in the wrong direction. But there is a silver lining in the data: Montreal is still more affordable than living in the GTA.
Even as home ownership is out of reach for an increasing share of Canadians, rents continue their dramatic rise in Montreal and in most major real estate markets. According to the real estate tracking site site liv.rent, the average rent for an unfurnished one-bedroom apartment in Montreal rose from $1,414 in 2021 to $1,573 last year.
St-Henri topped out as the most expensive neighbourhood in the metropolitan area, with average one-bedrooms priced at $1,834. This is still substantially below the GTA’s monthly average, which stands at north of $2000. Downtown and Westmount are now the second- and third-most expensive neighbourhoods for Montreal renters.
The Hochelaga-Maisonneuve neighbourhood records the lowest rents, with $1,332 per month for one-bedrooms. Other bargain areas include Oshlag, Notre-Dame-de-Grace and Villeray-Parc-Extension.
Higher rents and fewer homeowning opportunities are putting a squeeze on Canadians in most provinces. As a result, a widespread pessimism has descended. A third of all Canadians now believe they will never be able to buy a home, according to a survey this year by the Mortgage Professionals Canada (MPC).
That’s more than double the percentage who held that view in 2021. Amid this despair, banks are issuing fewer mortgages, interest rates are up and many prospective sellers are treading water amid the currents of the market.
Despite the gloom, 80 percent of Canadians believe that owning a home is a wise long-term investment, according to the MPC. Other findings from MPC’s survey include:
－ 69 percent of homeowners have fixed-rate mortgages.
－ 25 percent of mortgages feature variable or adjustable rates.
－ 47 percent of Canadians say a rate increase of 20 percent would make it difficult for them to meet mortgage obligations.
－ Among recent first-time buyers, 14 percent are already having trouble keeping up with their payments.
The report forecasts a 30 percent peak-to-trough drop in housing prices for this year. The survey is based on research commissioned by MPC from Oxford Economics and draws upon data collected from an online survey of over 2,000 Canadians.
Across Canada, more homes have actually been delisted than newly listed in many markets in recent months. Some of this has to do with unrealistic expectations of sellers, who have been accustomed to hearing about homes that were quickly bid up to more than 20 percent over their listing price, not so long ago.
Sometimes sellers will delist and relist at a lower price. Others will take the home off the market for the foreseeable future. An unlucky few may have purchased a new home but were unable to sell the old one, resulting in an unexpected change of plans.
This weakness could be short-lived. Here, it is prudent to take the long view, and in the broad sweep of market trends, Canadian housing prices have increased 375 percent over the past 20 years. This trend has been rewarding for many, but has also put the dream of home ownership out of reach for countless families.
