Downtown Montreal Real Estate - 2024 Report

Finally, we're starting to breathe a little easier. Interest rates began to drop in June, and we saw a 0.5% decrease in October. Banks had anticipated another cut by the end of the year, but with some data recently revised by Statistics Canada, that now seems less certain. Nevertheless, the Bank must consider the current situation, which isn't particularly good, so another cut, even of 0.25%, is likely.

The market didn't immediately react to the rate cut. It wasn't until September that we saw a difference among buyers. They remain cautious, but the decrease in costs associated with ownership has clearly motivated many first-time buyers.

Overall sales have increased in Greater Montreal, but prices haven't moved much. In downtown Montreal, as seen in the attached diagrams, the problem is that inventory remains high.

Downtown Montreal is a different market than other areas. The laws prohibiting foreign buyers are starting to have an impact. Sellers who bought before the law came into effect are now motivated to resell in larger numbers, and without buyers to replace them, inventory is starting to accumulate.

Traditionally, the rental market is extremely important for downtown Montreal. This has allowed condo owners who can't sell to rent out their units while waiting to find a buyer. In the past, this strategy has allowed sellers to avoid lowering prices.

With the economic effects of the pandemic on downtown areas across Canada, interest rates, reduced immigration, and the economic situation, buildings favored by foreign buyers have seen a decline in value not seen since 2008.

What's interesting is that this isn't something felt everywhere in downtown. It's really only in certain buildings, typically those constructed within the last 10 years, where a large number of units were pre-sold to foreign buyers. With the rate cuts and the economic recovery likely to follow in 2025, the situation will gradually stabilize, but it will be interesting to evaluate the results at the end of 2025.

Source: Centris Ville Marie ( Golden Square Mile, Central West, Cite du Havre, Cite de la Multimedia, Vieux/Old Montreal)