2025 REVIEW AND 2026 OUTLOOK

On January 23, 2026, I attended the presentation of the 2025 market review and 2026 outlook, hosted by FSMI (Fédération des chambres immobilières du Québec). The analysis was clear, thorough, and particularly insightful.

I thought it would be useful to share this information with you, as it provides a valuable framework for understanding market trends and for strategically planning your real estate and financial projects in 2026.

1. Key Points of the Quebec Real Estate Market

2025 Review: A very active year driven by strong demand, a persistent supply shortage (favoring sellers), and significant price increases, despite affordability challenges.

2026 Outlook: Market activity will remain high, despite a slight decline in sales (-2% in Quebec).

Market conditions will continue to favor sellers, but a modest easing is expected, with slower price growth projected (+6% for single-family homes, +3% for condominiums in Quebec).

2. New Home Market (Construction)

• Construction activity is increasing, but it remains dominated by the rental segment.

• The structural shortage of single-family homes is worsening.

• The number of completed unsold condominium units is rising, particularly in the Montreal CMA.

• 2026 housing starts are forecast at 58,000 units, mostly rental.

3. Rental Market

• Low vacancy rates and rising rents are supporting the resale market, as many renters are looking to buy.

• Average rents for two-bedroom units increased sharply in 2025 (e.g., Montreal +7.2%, Sherbrooke +9.9%).

4. Rental Market Watchpoints for 2026

• Rental housing costs will continue to rise, pushing more tenants toward homeownership.

• Rentals will continue to dominate housing starts, but construction supply remains insufficient to meet demand.

5. 2026 Purchase Intentions

• Purchase intent remains steady: 21% of Quebecers plan to buy within the next five years.

• Experienced buyers (59%) will continue to dominate the market.

• Single-family homes remain the most sought-after property type, but income properties (plexes) are gaining popularity as a way to reduce housing costs.

• First-time buyers continue to rely heavily on family assistance for down payments.

6. Affordability Comparison (Montreal CMA)

The Quebec real estate market shows different dynamics for each property type. Here’s a comparative summary based on 2025 data for the Montreal CMA:

• Duplex (Plex): Net monthly borrowing cost (after deducting rental income) is $1,113, making it the most affordable option.

• Condominium (Condo): Total monthly cost (mortgage + condo fees) is $2,310.

• Single-Family Home: Entry-level mortgage payment is $2,470.

Conclusion: The duplex is currently the most affordable option in terms of net monthly cost in the Montreal CMA.

7. 2026 Sales Intentions

• Sales intentions remain modest.

• A slow inventory recovery is expected in 2026 (+4% overall), but supply will remain structurally low, especially for single-family homes.

8. Key Trends to Watch in 2026

• Interest Rates: The decline in rates is over. The negotiated 5-year fixed mortgage rate is expected to remain around 4.04% in 2026, offering little relief for new buyers.

• Prices and Affordability: Prices will continue to grow, but at a slower pace. The mortgage burden has doubled over the past 10 years.

• Bidding Wars: The share of properties sold above asking will continue to decline slightly (projected at 10% for single-family homes and plexes, 5% for condos).

• Regional Trends: The Quebec market is stabilizing, with a slowdown anticipated in the Montreal CMA (-3% in sales) and a catch-up in the Quebec CMA (+8% median price growth for single-family homes).