Residential sales and prices surged amid tightening inventory, and urban rental markets, especially in Quebec City, experienced strong year-over-year growth. Meanwhile, office sectors in Quebec City and Montreal struggled with rising vacancies and negative net absorption despite stable net asking rents, and industrial markets saw Quebec City’s available sublet space increase while Montreal contended with a significant supply-absorption gap.
Residential Summary for Q4 2024
A March Edge Realty Analytics report indicated key trends in Quebec’s residential market for the fourth quarter of 2024.
Sales
Residential sales increased by 12.8% quarter-over-quarter and surged by 40.9% year-over-year.
Listings and Inventory
New listings rose by 3.0% from Q3 2024, while active listings declined by 3.0% sequentially; however, active listings recorded a more subtle increase of 0.2% on a year-over-year basis. The ratio of sales to new listings improved significantly from 68.6% in Q3 2024 to 75.1% in Q4 2024, reflecting increased market absorption.
The months of inventory dropped from 4.6 in Q3 2024 to 3.9 in Q4 2024.
Prices
Home prices experienced an increase of 1.8% compared to the previous quarter and a 7.5% rise year-over-year.
Under Construction
The volume of properties under construction increased by 1.1% from Q3 2024, although it fell by 6.3% compared to the same period last year.
Economic Indicators
Quebec’s population grew by 0.5% quarter-over-quarter and by 2.0% year-over-year, supporting ongoing housing demand. The unemployment rate edged up slightly from 5.6% in Q3 2024 to 5.7% in Q4 2024, while mortgage arrears remained stable at 0.17%.
Rental Market Overview
Source: Rentals.ca
Source: Rentals.ca
Office Market Overview for Q4 2024
Quebec City
The CBRE reports that in Quebec City, the Government of Quebec is considering downsizing its office footprint by vacating certain buildings. This potential downsizing is already exerting upward pressure on vacancy rates, which have increased by 80 basis points year-over-year. In addition, while Class B office space has maintained a relatively stable vacancy rate of around 10.0%, Class A properties experienced a significant increase in vacancy, to reach 16.4% over the year.
The Central Business District (CBD) recorded a negative absorption of 60,000 square feet, while Lebourgneuf faced a negative absorption of 92,000 square feet.
Montreal
Over in Montreal, the office market has been influenced primarily by a shift in occupancy patterns. Vacancy rates were driven up by occupied but available listings that transitioned to being vacant in Q4 2024.
Although overall net absorption was positive in Q4, this improvement was largely confined to the Downtown area, with a pronounced disparity emerging between Downtown and Suburban submarkets. A 300 basis point spread was observed, with Downtown vacancy rates at 18.2% compared to 21.2% in the Suburban areas. Moreover, both Downtown Class B and Suburban Class A properties trended similarly with significant negative net absorption for the entire year—recording negative 597,509 square feet and negative 472,422 square feet, respectively.
Despite these challenges, net asking rents have remained relatively stable.
Industrial Market Overview for Q4 2024
Quebec City
In Quebec City, the industrial market saw its availability rate increase by 40 basis points in Q4 2024, bringing the rate to 5.0%. Notably, available sublet space in the Greater Quebec City Area nearly doubled to reach 116,000 square feet. Net asking rents are showing signs of stability after three consecutive quarters of decline.
Montreal
Meanwhile, in Montreal, the industrial market presented mixed signals. The availability rate in the Greater Montreal Area climbed by 190 basis points year-over-year to settle at 5.0%. Although only 6.0% of total listings entered the market in Q4 2024, the year ended with a significant negative net absorption of 3 million square feet. 3.2 million square feet of new supply was recorded for the entire year.
In this competitive environment, listings with clear heights below 26 feet have emerged as more opportunistic for tenants, whereas properties with clear heights above this threshold have favoured landlords. For the sixth consecutive quarter, net rental rates in the GMA decreased, but the pace of decline slowed to 0.4%, well below the previous six-quarter average of 1.7%. Additionally, the GMA saw approximately 700,000 square feet of new industrial supply in Q4 2024, primarily concentrated in Laval, the East End, and the West Island, with a pre-leasing percentage of only 29.8%.
