Montreal real estate market defied condo slowdown with robust October sales

Montreal’s residential real estate market powered through October, notching a 5% year-over-year sales increase and marking the city’s fourth-best October since 2000, according to the Quebec Professional Association of Real Estate Brokers (QPAREB).

The market’s momentum came despite a notable dip in condominium sales, underscoring the resilience of other property segments. Single-family homes and plexes led the charge, with sales up 8% and 20%, respectively.

“October saw a continuation of the strong sales observed in the third quarter for the Montreal area. Despite an increase in inventory driven by condominiums, the market remains tight, with sales up 5 per cent,” said Charles Brant, QPAREB’s market analysis director.

“Taking into account the first ten months of 2025, the Montreal area is on track to close the year with its strongest sales performance in 25 years,” Brant said.

Condo market faces headwinds

Condominium sales fell by 4%, confirming a slowdown that has persisted through much of 2025. The segment’s challenges are being compounded by a sharp rise in condo fees—up 50% over the past five years in Montreal, according to QPAREB.

“These fees, which are factored into the debt service ratio when qualifying for a mortgage, have limited access to homeownership for many buyers, to the benefit of plexes, which are often seen as an alternative option,” said Camille Laberge, QPAREB assistant director and senior economist.

Laberge flagged that the supply of condominiums has been growing steadily since 2022, reaching a surplus of 1,000 units in October compared to the Montreal CMA’s 10-year historical average.

“In a market that is less tight, where negotiation has regained importance, it is now possible to find attractive buying opportunities with the strategic support of a specialized real estate broker,” Laberge said.

Inventory and pricing trends

Active listings climbed 7% year-over-year, driven exclusively by condominiums, while single-family homes and plexes remained scarce.

Despite the rise in supply, the market stayed in sellers’ territory, with median prices continuing to climb: single-family homes reached $632,000 (up 7%), plexes hit $850,000 (up 8%), and condos rose to $429,000 (up 4%).

The average time to sell dropped across all property types, with single-family homes moving in just 38 days.

Rate cuts and investor activity

The recent policy interest rate cuts since September have revived buyer demand and investor activity, QPAREB noted. The Bank of Canada lowered its policy rate to 2.5% in September and 2.25% at the end of October. 

“This is reflected in renewed household confidence in the market and active investor participation. As a result, prices continue to rise, and selling times are dropping rapidly, particularly for single-family homes and, even more so, for small income properties,” Brant said.

The latest BoC cut marks good news for Canada's housing market, according to TD Bank assistant vice president, real estate secured lending Crystal Leigh.

“If I think about what that actually means for Canadians, it comes as a relief as many Canadians have been waiting to make that important purchase decision. So think about lowering the cost of borrowing for Canadians. It really provides an opportunity for Canadians to feel more optimistic. And those sitting on the sidelines may enter the market as they benefit from this reduction,” she told Canadian Mortgage Professional.

Meanwhile, the federal government’s latest budget may prove too restrained to lift Canada’s slowing economy, potentially leaving BoC with little choice but to reduce interest rates again, according to economists.

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Budget may push Bank of Canada toward further rate cuts

The federal government’s latest budget may prove too restrained to lift Canada’s slowing economy, potentially leaving the Bank of Canada with little choice but to reduce interest rates again, economists said Wednesday.

The Bank of Canada lowered its policy rate to 2.25 per cent at the end of October and signalled it believed that level was consistent with supporting growth while containing inflation. But the new fiscal blueprint, unveiled Tuesday by Finance Minister François-Philippe Champagne, leans heavily on long-term spending and offers limited short-term stimulus — a mix that some analysts say could prompt additional easing.

“With the majority of spending focused on long-term defence and infrastructure projects, today’s announcement increases the likelihood that the Bank of Canada will still have to cut its policy rate below neutral to support growth,” Bradley Saunders, North America economist at Capital Economics Ltd., wrote in a note to clients.

According to Saunders, the new commitments will push the federal deficit to nearly twice its current size by the end of the decade, rising to $56.6 billion in 2029–30 compared with $36.3 billion in 2024–25. That, he said, “will amount to 2.5 per cent of gross domestic product, implying the new measures hardly constitute the ‘generational’ change Finance Minister François-Philippe Champagne had promised.”

A measured response to weaker growth

The Bank of Canada said last month that the economy was undergoing a structural adjustment triggered by U.S. tariffs introduced under President Donald Trump, as global trade patterns and supply chains continue to realign.

“The structural damage caused by the trade conflict reduces the capacity of the economy and adds costs. This limits the role that monetary policy can play to boost demand while maintaining low inflation,” the central bank said in its Oct. 29 statement.

That message was widely interpreted as an invitation for Ottawa to do more through fiscal policy. But analysts reviewing the budget’s details found little in the way of immediate support. Saunders calculated that the measures contain only about $9 billion in net new spending this fiscal year and next, after stripping out previously announced commitments.

The spending plan included $36 billion in tax relief, $63 billion for defence, $13 billion for infrastructure and $28 billion in other programs, offset by $51 billion in savings and cuts.

Limited near-term boost

Economists at Bank of Montreal, Robert Kavcic and Shelly Kaushik, reached similar conclusions. “We estimate net new announcements of $4 billion for this fiscal year and a bit more for the next,” they said in an analysis of the budget.

“The important takeaway here is that there is indeed a large wave of stimulus hitting the economy, but we already knew about the vast majority of it, and therefore won’t be scrambling to sharply revise up our growth forecast in the wake of this budget,” they said.

“Additionally, Ottawa is banking on an acceleration in private-sector investment with the aid of fast-tracked approvals across a range of projects/industries — that’s certainly encouraging, but success there will depend highly on execution,” the BMO economists added.

Implications for mortgage markets

For lenders, brokers and homebuyers, the conversation now turns to whether interest rates have further to fall — and how fast.

Capital Economics, which has generally taken a more dovish stance than market consensus, has projected that the central bank may deliver two additional 25-basis-point reductions next year. That would push the policy rate below the lower end of the Bank of Canada’s estimated neutral range of 2.25 per cent to 3.25 per cent — the level at which rates are considered neither stimulative nor restrictive.

While economists agree that the fiscal plan provides some stability and predictability for long-term projects, they also note that the near-term impact on demand may be too small to offset trade headwinds and subdued private investment.

For mortgage professionals, that could mean a more extended period of lower rates — a development that may bring modest relief to borrowers, but also signal a slower recovery in housing demand.

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Mortgage renewal shock looms for 2026, but credit quality remains resilient: CIBC

Canada’s household credit landscape has held steady, but cracks are emerging at the edges as the country braces for a wave of mortgage renewal shocks in 2026, according to a new CIBC Capital Markets report.

While overall insolvency rates have stabilized at pre-pandemic levels, economist Benjamin Tal said the apparent calm masks a significant shift beneath the surface.

“The relative stability in the insolvency trajectory has been masking a significant substitution between rising proposals and falling bankruptcies,” Tal said.

He called this trend positive for lenders, since proposals tend to result in lower losses and higher recovery rates than bankruptcies.

Credit growth has slowed from the pandemic’s breakneck pace, now hovering around 4% year over year. But that growth is being driven less by new borrowers and more by larger average loan sizes — up 27% since 2019 and a striking 46% since early 2022.

Gen Z is leading the way in credit growth, though their share of total outstanding debt remains modest.

Despite a weakening labour market, credit utilization has stayed remarkably stable at 65%. Average credit scores remain well above 2019 levels, and the share of subprime borrowers, while rising, is still consistent with a balanced market. But Tal cautioned that “risk is at its usual place — at the margins.”

The 30+ day delinquency rate among subprime borrowers has climbed to 11.5%, “notably higher than pre-covid levels.”

Among renters, who make up the bulk of non-mortgage borrowers, the 90+ day delinquency rate is now 0.2 percentage points above pre-pandemic levels, a trend Tal doubted would reverse soon.

Mortgage holders are also feeling the strain. The 90+ day delinquency rate for homeowners has risen slightly above 2019 levels, driven more by job loss than payment shock so far.

However, Tal warned that the real test is coming: “We expect the share of borrowers facing payment shocks of more than 40% to reach 5%-6% of the mortgage portfolio — more than double the share seen in 2025.”

He said most of this impact would be felt in the second half of 2026, as borrowers who locked in ultra-low rates during the pandemic face renewal at much higher rates.

Still, Tal argued that the overall risk to the financial system remains contained.

“Our assessment that we are already very close to peak unemployment for the current cycle, along with a reasonable starting point and increased pre-emptive activity by lenders, suggests that future credit losses should be consistent or even better than what might be priced in by the market.”

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Ontario moves to ease homeownership costs for first-time buyers

 Ontario’s government unveiled a plan to remove the full 8% provincial portion of the harmonized sales tax (HST) for first-time buyers of newly built homes valued up to $1 million—a move the Ontario Real Estate Association (OREA) called “much-needed relief” for those entering the market.

“Keeping the dream of homeownership alive is a key goal that the Ontario Real Estate Association (OREA) and REALTORS across the province have long been fighting for,” Cathy Polan, OREA president, said.

“For years, we have called on the Government of Ontario to work on lowering housing costs by providing incentives and new, innovative pathways to homeownership for first-time home buyers—and today’s announcement did just that.”

New tax relief could put thousands back in buyers’ pockets

The province estimated that the HST cut could mean up to $80,000 back for first-time buyers, a figure OREA described as “a welcome and much-needed relief for those who are making one of the biggest financial transactions of their lives.”

The new rebate would also align with the federal government’s proposed phased reduction for homes valued between $1 million and $1.5 million, potentially providing up to an additional $24,000 in rebates for buyers in that range.

While these numbers have been widely cited by industry groups, the actual savings will depend on the final details of the legislation and how many buyers qualify.

Industry welcomes move, but affordability challenges remain

OREA commended the Ford government for “continuing to protect Ontario and keep costs down,” with Polan adding, “This type of bold action, combined with the tax relief proposed by the federal government, is exactly what we need to help young Ontarians and their families get a foot on the homeownership ladder.”

The announcement builds on the recently introduced Bill 60, the Fighting Delays, Building Faster Act, 2025, which aimed to accelerate housing construction and reduce red tape for developers. However, some housing economists have cautioned that tax relief alone may not be enough to address Ontario’s chronic supply shortages and rising prices, which have pushed homeownership further out of reach for many.

Polan thanked Premier Doug Ford and key ministers for “working to ensure that the next generation of Ontarians can find a great place to call home.” Still, affordability remains a complex challenge, with factors like interest rates, supply constraints, and wage growth all playing a role.

Canadian home prices have skyrocketed over the past 30 years, especially in big cities, according to a new REMAX Canada report. Population growth and policy changes have fueled these sharp increases.

Home prices have climbed much faster than wages, making it tougher for first-time buyers to get into the market. In the Greater Toronto Area, for example, average family income grew by just 34.6% from 1994 to 2023, while home prices more than quadrupled.

“Affordability, population growth and supply shortages are the recurring themes shaping residential housing in Canada,” Kottick said.

“While each market exhibits local nuances—Vancouver’s looming condo shortage, Edmonton’s affordability and Halifax’s steep climb in values—the shared pressures unite all major regions.”

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Here's how much Canadian home prices have surged over the last 30 years

Canadian home values have soared over the past three decades, with major urban centres experiencing triple-digit gains driven by population growth and shifting policy levers, according to a new REMAX Canada report.

Halifax, the Greater Toronto Area (GTA) and Saskatoon led the nation, with average prices rising between 377% and 460% since 1994. But as equity gains reward existing owners, new buyers face some of the toughest market headwinds in recent memory.

“Home ownership continues to be the greatest driver of wealth, especially at the middle-class level,” Don Kottick, president of REMAX Canada, said.

“Each generation of Canadian homeowners—from Baby Boomers to Gen Z—has faced its challenges and obstacles. Today’s trade barriers, high interest rates and stringent lending policies may be overwhelming, but this too shall pass.” Kottick added that market cycles have historically rebounded, with periods of contraction giving way to renewed growth.

Price appreciation outpaces wage growth

The global real estate franchisor’s analysis of nine major Canadian markets found that Halifax posted the highest 30-year increase, with prices up 460% (from $103,481 to $579,521, CAGR 5.91%).

The GTA followed at 436.2% (from $208,921 to $1,120,250, CAGR 5.76%), while Saskatoon saw a 377% rise (from $90,583 to $384,611, CAGR 5.35%).

In contrast, Newfoundland and Labrador trailed with a 244% gain (from $92,799 to $319,619).

Across the board, average price escalation has far outpaced wage growth, making it increasingly difficult for first-time buyers to enter the market. In the GTA, for example, average family income rose just 34.6% from $97,300 in 1994 to $131,000 in 2023, while home prices surged more than fourfold.

“Affordability, population growth and supply shortages are the recurring themes shaping residential housing in Canada,” Kottick said.

“While each market exhibits local nuances—Vancouver’s looming condo shortage, Edmonton’s affordability and Halifax’s steep climb in values—the shared pressures unite all major regions.”

Population growth strains supply

Canada’s population growth has consistently outstripped housing supply, especially during the pandemic years. Calgary and Edmonton saw population increases of 121% (from 805,810 to 1,778,881) and 87% (from 873,222 to 1,631,614) respectively from 1994 to 2024, fueled by immigration and targeted provincial campaigns.

Nationally, the country crossed the 40 million mark in 2023, but housing starts have lagged, with the Canada Mortgage and Housing Corporation warning that construction slowdowns threaten future affordability.

A chronic undersupply of homes has left Canada with the lowest number of housing units per 1,000 residents among G7 nations, according to Scotiabank.

“Supply gaps are worsening, and the pace of new construction does not bode well for the future of Canada’s housing markets,” Kottick said.

“The chronic undersupply will lock a growing number of potential buyers out of the housing market for longer and perpetuate the affordability crisis.”

Policy levers and the path forward

Government interventions, ranging from foreign buyer taxes to mortgage stress tests, have shaped market cycles, sometimes cooling overheated segments but also constraining access for new buyers.

Recent federal initiatives, such as the planned Build Canada Homes agency and $13 billion in funding for modular housing, aim to address the supply gap, but industry leaders warn that more comprehensive reforms are needed.

Despite these challenges, Canadians remain committed to home ownership. The national home-ownership rate stood at 66% in 2021, with cities like Calgary and St. John’s outperforming the average.

“Given the importance of home ownership, governments should be working to assist would-be homebuyers in the quest to realize the dream,” Kottick said.

CMP

We hope you are finding our Blog informative and enjoyable to read while keeping you up to date with the ever changing real estate market. 

Please feel free to contact me via Direct/Text or e-mail at any time and my team will be pleased to assist you, family members and friends with all your real estate needs. Referrals are always welcome and rewarded!