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The Montreal Real Estate “Boom” Compared To Toronto and Vancouver

Montreal real estate is the hottest in Canada when it comes to price increases. Outpacing both Toronto and Montreal, there’s speculation it’s the next Canadian bubble. Turns out if you look at the long-term trend, this is pretty normal. During the Great Recession, Montreal real estate peaked after Toronto and Vancouver began tapering. Despite this, Montreal has a long way to go to give investors the same kinds of returns.

Montreal Real Estate Is Significantly Cheaper

First, let’s take a broad look at prices. Montreal real estate prices are significantly lower than Toronto or Vancouver.  The price a of a typical home in Montreal is $350,000 as of October. The price of a typical home in Toronto is $766,300, about 118% higher than it is in Montreal. In Vancouver the price of a typical home is $1,062,100, over 203% higher than Montreal. For context, Montreal has more density than Toronto, but less than Vancouver.

Montreal Real Estate Benchmark

The price of a typical home in Montreal, compared to Toronto and Vancouver. In Canadian dollars.

Source: CREA, Better Dwelling.

Montreal Real Estate Prices Don’t Grow Very Fast

Montreal real estate price growth is attracting attention since it leads the country. The price of a typical home in Montreal is 6.29% higher than the same time last year. To contrast, Toronto is “just” 2.64% higher than last year. Vancouver is at just 1.03%. Montreal is growing at twice the pace of Toronto, and six times Vancouver. That’s wacky growth.

Except Montreal has lagged Toronto and Vancouver significantly over the past few years. Montreal’s most recent peak growth was in June 2010, when the annual growth rate hit 8.89%. To contrast, Toronto’s peak was 31.43% in April of 2017. Vancouver reached an even higher 32.61% peak annual growth, reached in July 2016. Montreal might be higher today, but it’s trailing recent peaks… by a lot.

Montreal Real Estate Price Change

The annual percent change for the price of a typical home in Montreal, compared to Toronto and Vancouver.

Source: CREA, Better Dwelling.

Montreal real estate also trails Toronto and Vancouver over the long-term. Montreal prices have gained 41.19% over the past 10 years. Meanwhile, Vancouver is up 96.98% and Toronto is up 113.34% during the same period. In order for prices to catch up, Montreal prices would need to double from here. That assumes flat prices in Toronto and Vancouver.

The takeaway? Montreal real estate prices are cheaper, grow slower, and underperform Toronto and Vancouver. Montreal is home to some of the cheapest real estate in the whole country, despite being a large city. The faster than normal growth observed now is more likely a game of catch up, than a new bubble market.