Investors in Montreal’s multi-family real estate market have to dig ever deeper to find truly profitable deals. Once one of the hottest segments, this market is now cooling: immigration has slowed, and the housing supply has grown noticeably.
According to James Wilson of Realstar, there are no longer any one-size-fits-all solutions:
“Now you have to analyze literally every neighborhood and every property. Only then can you find unique characteristics that justify the investment.”
He spoke at the Montreal Real Estate Forum, held April 14–15 in Montreal, where the key theme was risks and new opportunities in the market.
In his view, this “targeted” approach will remain relevant for at least another 12–18 months. A forecast by the Canada Mortgage and Housing Corporation (CMHC) shows that Montreal’s vacancy rate could reach 4.5% by 2028, versus an average of about 2.5% over the past ten years. For new residential complexes, the figure could rise to 6.5%—due to high rents, weakening demand, and increasing supply.
This means one thing: investors should avoid areas with active new construction and look for “undersupplied” locations.
Residential Real Estate: Cautious Optimism
Despite the cooling, Montreal remains a strong market. Last year it delivered the best results in Realstar’s portfolio and proved less exposed to the housing affordability crisis than Vancouver and Toronto. In a number of properties, rents continue to rise.
Retail: Stability and Investor Interest
The retail real estate sector—especially open-air formats (shopping centers under the open sky)—on the contrary, is attracting more and more capital. According to Taylor Brown of Salthill Capital, Montreal is one of Canada’s most attractive markets alongside Calgary.
Over the past three years, the company has invested about $115 million in such assets in the city. The reasons for the interest are the market’s resilience and the relatively low cost per square meter compared with other major cities.
However, growing investor interest is intensifying competition and pushing prices up: capital is actively flowing into retail from more challenging segments.
A Bet on Recovery
Fiera Real Estate believes Montreal is now emerging from an economic downturn. The recent purchase of the Faubourg Bois-Franc complex in the Saint-Laurent area (near the REM station) for $45 million reflects confidence in the potential for income growth and the attractiveness of the price relative to replacement cost.
Offices: Cheap, but with Risks
The office real estate segment after the pandemic offers perhaps the most “mouthwatering” deals—but not without a catch.
As Brian Spatzner of MTRPL notes:
“We’re buying buildings for less than what it would cost to build them. But the problem is they often have high vacancy. There’s no free lunch.”
The company sees more opportunities in offices than in residential real estate, where pressure is increasing due to political factors. At the same time, the key challenges are securing financing and then leasing the space.
Among recent deals are the purchase of the office portion of the Les Cours Mont-Royal complex in downtown Montreal, as well as a building on Saint-Laurent Boulevard.
Interestingly, most of the company’s office properties are already fully leased, with the exception of one large project.
Conclusion
Montreal’s real estate market has entered a new phase. There are fewer quick and obvious wins—replaced by the need for deep analysis and strategic selection.
— In residential—growing supply and pressure on occupancy.
— In retail—stability and an inflow of capital.
— In offices—high returns with elevated risks.
The main takeaway for investors: the era of “easy deals” is over. Now the winners are those who are ready to work in a targeted way, analyze more deeply, and make more considered decisions.
