Montreal's real estate market is shifting. After years of rapid price appreciation and low inventory, we're seeing conditions normalize. This article breaks down what's changing, why it matters, and what it means if you're buying, selling, or watching the market.
Inventory is Rising
The most significant trend right now is inventory growth. As of January 2026, Montreal has approximately 3,240 active listings across all property types. That's up 12% compared to January 2025 and up 18% from the same period in 2024.
What this means: More choice for buyers. Properties are staying on the market longer. Sellers can't rely on scarcity to drive bidding wars. If you're buying, you have more negotiating leverage than you did 12-18 months ago.
Key Takeaway
Rising inventory doesn't mean prices are crashing. It means the market is rebalancing from extreme seller advantage toward something closer to neutral. This is healthy for long-term market stability.
Price Growth is Slowing, Not Reversing
Median home prices in Montreal are still up year-over-year, but the rate of appreciation has slowed considerably:
- 2023: Prices rose 8.5% year-over-year
- 2024: Prices rose 4.2% year-over-year
- 2025: Prices rose 2.1% year-over-year
- Current (Jan 2026): Prices are up 1.8% year-over-year
This deceleration is happening across most neighborhoods, though high-demand areas like Plateau Mont-Royal and Mile End are still seeing stronger growth (3-4% annually) compared to outer boroughs (flat to 1%).
What this means: If you bought in the last 2-3 years expecting 8-10% annual appreciation to continue indefinitely, adjust expectations. A more sustainable 2-4% annual growth rate is more realistic long-term.
Days on Market Are Increasing
The average property in Montreal now sits on the market for 32 days before selling, up from 24 days a year ago and 18 days two years ago. In competitive neighborhoods like Verdun and Griffintown, properties that once sold in under a week are now averaging 15-20 days.
What this means: As a buyer, you have more time to do diligence, arrange financing, and negotiate. As a seller, you need to price competitively from day one. Overpricing and expecting to "test the market" will result in stale listings and lower eventual sale prices.
The Impact of Interest Rates
The Bank of Canada has held rates steady at 4.25% since November 2025. While this is lower than the peak of 5.0% in mid-2023, it's still significantly higher than the sub-2% rates buyers enjoyed in 2020-2021.
Higher rates affect affordability through:
- Monthly payments: A $500K mortgage at 2% costs $1,847/month. At 4.5%, it costs $2,533/month.
- Stress test qualification: Buyers must qualify at 6.25% (current stress test rate), reducing purchasing power by 15-20%.
- Investor returns: Higher financing costs reduce cash flow for rental properties, cooling investor demand.
What this means: If rates drop in 2026 (current consensus expects 1-2 cuts), we may see a spring bump in activity. But don't expect a return to 2020 rates. Plan for a 3.5-4.5% mortgage environment for the next 2-3 years.
Neighborhood Divergence
Not all Montreal neighborhoods are experiencing the same market conditions. We're seeing clear divergence:
- Strong demand: Plateau, Mile End, NDG, Outremont maintain low inventory and quick sales.
- Steady demand: Rosemont, Verdun, Villeray showing balanced conditions with moderate inventory.
- Softening demand: Some outer suburbs and condo-heavy areas (especially new construction) seeing slower sales and price pressure.
What this means: Generalized market statistics don't tell the full story. A "cooling market" in one neighborhood might still be competitive in another. Focus on local data, not citywide averages.
What to Watch Next
Several factors will shape Montreal's market over the next 6-12 months:
- Bank of Canada rate decisions: Next decision February 5, 2026. Current forecast: hold at 4.25%.
- Spring inventory: Will more sellers list as weather improves? Spring 2026 inventory will signal market direction.
- Immigration policy: Federal immigration targets affect population growth and housing demand.
- New construction completions: Large condo projects finishing in 2026 will add supply, particularly downtown and Griffintown.
Bottom Line
Montreal's market is normalizing after years of extreme tightness. This creates opportunities for prepared buyers and requires smarter strategy from sellers. Markets don't move in straight lines, and volatility creates opportunity for those who understand what's happening.
How to Use This Information
If you're buying: Use rising inventory and longer days on market to negotiate. Don't rush into bidding wars if properties are sitting. Focus on neighborhoods with fundamentals you value, not just cheapest entry points.
If you're selling: Price competitively from day one. Properties that sit stale get stigmatized. Consider selling in spring when demand typically peaks. Prepare your property to stand out in a higher-inventory environment.
If you're watching: Track inventory levels weekly, not just prices. Inventory is a leading indicator. When inventory rises but prices hold, it signals potential future price softening. When inventory tightens, expect renewed competition.
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