Quebec’s Real Estate Market Continues to Stand Out, Deepening the Affordability Crisis

In the residential construction sector, Canada’s retaliatory tariffs on imports from the US are gradually starting to affect costs for builders who rely on materials sourced from that country. Almost half of construction-related goods imports come from the United States External link.. These include engineered wood products, drywall, certain steel and aluminum components and finished goods such as large appliances. Even though many of these items are currently exempt from Canadian counter-tariffs, this may very well change. If that were to happen, higher costs for these materials could lead to increased project budgets and potential delays. The homebuilding industry will likely need to adjust by diversifying supply chains, finding local substitutes and improving its productivity.

Aside from all that, building costs have stabilized at significantly higher levels than those seen in 2019 (graph 2). In addition, the collective agreements recently reached in the construction industry will increase wages, which will be yet another factor driving up the cost of housing construction (graph 3). 

Despite the loss of affordability, housing starts remain robust for now. But that may not last if the market proves unable to absorb less affordable homes, which could deter some builders (graph 4).

While greater supply should help restore balance to the market and ease price pressures over the medium term, an enormous number of homes will need to be built to bring affordability back to pre-pandemic levels.

Quebec housing starts vary widely across the regions (graph 5). Municipal involvement affects builders’ eagerness to launch new projects. For example, municipalities that offer tax credits for certain types of construction or other incentives will attract more builders and developers than those that charge development fees. This can be seen in the cities of Rimouski and Rivière-du-Loup, which are both located in Bas-Saint-Laurent. They’re working with a wide range of community members to build large numbers of units, as we can see in the massive upsurge in this region’s housing starts in the first quarter of 2025. 

But this kind of rapid construction presents other challenges for cities. For example, many of them don’t have enough water infrastructure for all the new housing units, which is slowing down the pace of construction. Other challenges—such as labour shortages, regulatory constraints and limited land availability—also stand in the way of new housing development.

Quebec’s current pace of residential construction is expected to slow in the coming months as economic uncertainty takes hold. However, measures to increase housing supply have been taken by many municipalities, Canada Mortgage and Housing Corporation and the federal government, like the GST/HST new residential property rental rebate. These measures should stay in place, which will boost residential construction wherever they’re implemented. All things considered, we expect Quebec housing starts to climb nearly 10% in 2025 and then level off in the following years. 

The current rate-cutting cycle is encouraging many potential homebuyers, but the shortage of houses for sale is pushing prices to new highs. Bidding wars have even reappeared in the Quebec census metropolitan area (CMA). A lack of inventory appears to be the main reason for higher selling prices in the Quebec CMA.

Market conditions remain relatively balanced in the Montreal and Gatineau metropolitan areas, but it’s a seller’s market in most other Quebec regions (graph 6). Sales have outpaced new listings since the start of the year, but now appear to have stabilized. However, listings have been rising since January and have finally exceeded their 10-year average (graph 7). 

Days on market have also decreased since last year, which is more good news for owners intent on selling their homes. In addition, unlike national home prices, which have fallen, average home prices in all regions of Quebec have climbed significantly in recent months (graph 8). 

Fading consumer confidence nevertheless suggests resale market activity may slow, resulting in fewer transactions by the end of 2025. The rise in new listings is expected to ease price pressures. Yet prices are expected to remain high and continue to climb, albeit at a more modest pace, through the end of 2025 and into 2026 (graph 9).

Meanwhile, new federal and provincial regulations on temporary immigration are gradually being implemented, slowing population growth across the country (graph 10). Quebec experienced zero population growth in the second quarter of 2025. This trend will likely continue into 2026, which suggests housing demand will cool over the next several months.