Rent Affordability Will Improve Slowly in Quebec

Moving season may be behind us, but rent affordability remains a top concern for many Quebec households. Despite some signs of easing elsewhere in Canada, rents continue to rise at a relatively steady pace in Quebec. Asking rents are falling slower in the Montreal metropolitan area than in several other major Canadian markets.

Yet the rental housing supply has been growing in recent years. This has gradually pushed up the vacancy rate, with some segments of the Montreal market now back in balanced territory. In theory, more supply should mean less pressure on rents and greater affordability, but this has been slow to materialize. That’s because new rental units usually come with much higher asking rents than existing units do. The post-pandemic spike in construction costs has made it much harder to turn a profit on rental projects, forcing developers to target tenants who can afford well-above-market rents. In other words, increasing the rental supply won’t necessarily help those households hit hardest by the affordability crisis.