Montreal Home Sales Down 13%, Prices Up: Why 'Rebalancing' Doesn't Mean What You Think

The Quebec Professional Association of Real Estate Brokers calls it a "rebalancing." In August, transaction volume across the Montreal CMA dropped 13% year-over-year while median prices for single-family homes, condos, and plexes all climbed. The association frames this as a shift toward more balanced conditions after years of extreme seller advantage.

That framing is careful. It's also misleading if you're trying to understand what happens next.

The Volume-Price Split Reveals Who's Still in the Market

When sales crater but prices hold, the composition of the buyer pool has changed. Fewer people are transacting, but the ones who remain are well-capitalized and competing for specific inventory. This isn't a broad market. It's a narrow one where the marginal buyer, the household stretching to qualify, has been priced out by the stress test and current rates.

The result is not equilibrium. It's selection bias dressed up as stability. Prices stay firm because only buyers who can clear a high bar are still bidding. The 13% who left weren't the price-setters. They were the volume.

Montreal's stress test qualifying rate in September 2026 sits roughly 500 basis points above the contract rates on low-ratio mortgages, which means a household earning $85,000 qualifies for about 30% less mortgage than they did in early 2022. That's not a marginal tightening. It's a wall. Prices haven't corrected because the people who would force that correction are no longer in the room.

What "More Listings" Actually Signals

Active inventory has climbed 18% compared to a year earlier, and condominiums now take an average of 62 days to sell. The association points to this as evidence of more choice for patient buyers.

It's also evidence that sellers are holding out for prices the current buyer pool won't pay. Properties don't sit longer because buyers suddenly have time to think. They sit longer because the bid isn't meeting the ask. The condo segment is particularly exposed here: rising insurance premiums and maintenance fees under Law 16 and Law 141 are compounding the rate problem. A buyer who could have stomached a 3.5% mortgage in 2025 is now facing materially higher condo carrying costs, and the qualification math doesn't close.

Inventory rising in that context is not a rebalancing. It's a standoff.

The Plex Exception Proves the Rule

Multi-unit properties remain an outlier. In a high-rate environment, a duplex or triplex with rental income helps buyers qualify for larger mortgages. Montreal's zoning and stock make this strategy viable in ways Toronto's and Vancouver's don't. If the rebalancing story were about broad affordability improvement, the plex segment would be softening along with everything else. Instead, it's holding because it solves the financing problem for buyers who can't otherwise clear the bar.

That's selection again. The market isn't broadening. It's segmenting by who has the tools to still transact.

Why This Matters for 2027

The narrative you'll hear is that the market is stabilizing, that the extremes are behind us, that patient buyers now have leverage. Maybe. But only if rates fall faster than sellers adjust their expectations, and only if the stress test doesn't keep qualification thresholds locked above where most households can reach.

Right now, the 13% decline in sales volume is doing all the work. Prices aren't being tested because the testers left. That doesn't make the market balanced. It makes it shallow. The term "rebalancing" implies a return to normal transaction patterns at sustainable prices. What Montreal has in September 2026 is fewer transactions at prices that reflect a buyer pool half the size it was four years ago.

Call that a lot of things. Balanced isn't one of them.