Montreal New Build Vacancy Hits 8.4 Percent
New rental units in Montreal remain empty at a rate nearly three times the city average, signaling a mismatch between supply and demand.
The vacancy rate for rental units in Montreal buildings constructed between 2022 and 2025 stands at 8.4 percent. This figure is nearly three times higher than the citywide average of 2.9 percent. The citywide rate aligns with standard benchmarks used in the real estate sector.
Data from the Canadian Mortgage and Housing Corporation confirms this disparity. Buildings erected before 1940 show a vacancy rate of only 2.1 percent. The gap indicates that current development does not match the actual needs of the tenant pool.
Price barriers drive empty units
Developers cite high construction costs as a primary driver for unit pricing. Jean-Philippe Meloche, a professor of urban economy at Université de Montréal, notes that these units are often priced out of reach for average residents. The market is adjusting slowly, leaving many new apartments vacant.
CoStar data supports this trend. The average vacancy rate for buildings with five or more units is 4.7 percent. For those built after 2020, the vacancy rate reaches 13.4 percent. Buildings constructed before 2020 maintain a lower vacancy rate of 3 percent.
Policy incentives miss target demographics
Federal and provincial incentives have encouraged high-density projects with smaller units. Nicolas Galardo, partner at Groupe Montclair, argues these incentives do not target the right demographic. The focus has been on individual occupancy rather than family housing.
Benoit Rullier of the Coalition of Housing Committees and Tenants Associations of Quebec points to a systemic issue. Developers are building housing that is too expensive for the average tenant. The current development programs fail to address the core affordability gap.
Promotional discounts signal market distress
Owners of new buildings offer aggressive promotions to attract tenants. Common incentives include three months of free rent and waived utility costs. Galardo states that widespread use of these discounts indicates worrisome vacancy levels.
Quebec political parties are responding to this housing crisis. Québec solidaire proposes an 11.8-billion-dollar plan to add 50,000 social housing units. Half of these units would be built from scratch. The election is weeks away, intensifying debates on housing policy.
