REFRESHER: How to Interpret the Numbers
As a reminder:
Less than eight months of supply of homes on the market is considered a sellers’ market; the advantage in negotiations and pricing will tend to lie with the sellers.
Between eight and ten months of inventory is considered a balanced market; buyers and sellers are equally advantaged.
A market with more than ten months of supply will favour buyers, and will tend to allow these buyers to negotiate more effectively, and aggressively.
One important thing to note is that for each area, we’ve consolidated all types of properties into a single category. This means that while single-family homes might be in a strong sellers’ market, other property types, such as revenue properties, could be lagging in the buyers’ market, causing an area as a whole to be slightly mis-weighted towards a more balanced overall status.
STABLE: Current Q1 Numbers
Looking at the current numbers: It seems that the market is in a healthy place, with a slight advantage tipped towards sellers, in most areas.
Westmount and Ville-Marie are in a buyers’ market, while areas like Brossard and Verdun are still found to be in a tight sellers’ market. This situation is not too different from what we observed last year.
OPPOSING FORCES: What These Numbers Don’t Show
Something really interesting is happening in the market these days: I wouldn’t say it reminds me of mid-COVID, but there are some similarities. Many global factors that would typically make buyers and sellers hold off on their projects, and wait to see what happens, e.g., tariffs and overall trade wars, might seem to be at play. However, this is not what is currently happening.
What these numbers don’t show are the immense forces at play, like the currents just below the surface of the river. For Montréal, we’re seeing a 16% increase in sales this year (demand), compared to last. This would seem to reflect an increase in buyers’ appetite to purchase real estate. Additionally, a 15% increase in new listings coming onto the market (supply), shows that sellers are willing to participate.
The two forces are neck-and-neck, with demand pulling away from supply (ever so slightly) each week, resulting in an increase in median price in all categories: 3% for homes, 5% for condos, and 10% for revenue properties. This is overall reasonable. Keep in mind these are median price increases year-over-year, and revenue properties, did not perform as well as we are now seeing, in the prior year.
For the province as a whole however, these two currents are not of equal force, and may be an early illustration as to where things could be headed. Sales are up by 14% (demand); however, new listings coming onto the market are only up 10% (supply); a 4% deficit found between these two currents in total inventory. This separation has resulted in median prices rising 10% for homes, 7% for condos, and 20% for revenue properties. This is a clear indicator of what happens when supply and demand start to diverge from one other considerably.
WHAT CAN HAPPEN: The Remainder of 2025
In a dynamic market where strong forces oppose each other, things can easily tilt in one direction or the other.
While supply is keeping up with demand for Montréal, this is not the case for the province as a whole.
We shouldn’t underestimate the effects of low interest rates. If demand were to continue to outpace supply, like we saw during COVID, this could lead to issues like skyrocketing prices, an affordability crisis, inflation, etcetera.
In addition, if and once such a trend sets in, sellers tend to hold back more. They want to keep their “appreciating asset,” which only exacerbates the imbalance.
CURRENT: State of Affairs
In the current state of affairs, if rates were to drop even further, it could bring on the effects of overkill. We know the Bank of Canada is not fluctuating their interest rates solely based on real estate. National real estate, nor Québec’s provincial real estate, are not the only factor which will dictate interest rates. We must consider what this will mean for ourselves, and our neighbours’ decisions, as they move in the market.
As of today, for our province, the real estate market seems to be hot enough to be healthy, and does not need any additional stimulation, which might induce a fever. A supply/demand imbalance, driven by lowered rates and limited new construction, could easily lead to overheating.
As I laid out, this situation could change quickly; and, of course, as your primary real estate resource, we will keep you well-informed.