August 28, 2025

3 key issues affecting Quebec’s residential real estate market in 2025

What issues will impact Quebec’s residential real estate market in the coming year? Experts who participated in the 2025 Forum immobilier résidentielof the Quebec Professional Association of Real Estate Brokers (QPAREB) share their insights. Inspired by the 35th episode of the Real Estate in Motion podcast, this article explores the impact of the economy on household purchasing power, the evolution of housing types in Quebec, and the legal issues surrounding a withdrawal after an inspection. Here’s everything you need to know about the major trends in the Quebec real estate market.

Impact of the economy on household purchasing power

In the current climate, do buyers have the purchasing power needed to buy a home? Whether it is rising inflation, higher mortgage interest rates, or increasing home prices, the Quebec residential real estate market is facing a number of challenges.

Tania Bourassa-Ochoa, Deputy Chief Economist, Canada Mortgage and Housing Corporation (CMHC), and Hélène Bégin, QPAREB Senior Economist, Quebec Real Estate Market and Economy, share their analysis of the impacts of these economic factors.

Household purchasing power and limited choices

Household purchasing power has declined significantly over the past 20 years. According to Tania Bourassa-Ochoa, affordability has deteriorated since the COVID-19 pandemic. “Housing costs now take up a larger share of household budgets. Their options are also more limited,” she explains.

Today, more and more buyers are turning to properties priced at the upper limit of their financial capacity. According to a CMHC survey, about 50% of buyers take out the maximum mortgage they can borrow. This trend is partly due to the sharp rise in house prices in Quebec.

When household budgets tighten, the choices available to them shrink. A case in point is that of Ottawa–Gatineau: in 2004, a household with a typical income had access to 90% of the properties on the market. By 2024, that percentage had dropped to 25%. In other words, only one quarter of homes are now accessible to this type of household, explains Tania Bourassa-Ochoa.

Uneven recovery of the Canadian housing market

The resilient Quebec market is not as severely affected as some areas such as Toronto and Vancouver, where average property prices are now close to or above one million dollars. “Properties are expensive in Quebec, but the market remains less sensitive. However, there is usually a three- to six-month lag before the Quebec residential real estate market begins to deteriorate,” notes Hélène Bégin.

In Quebec, the housing market is beginning to weaken in regions more affected by rising tariffs and higher unemployment rates. Even though the overall outlook for the Quebec real estate market remains positive, some sectors are already seeing a slow down.

Shifts in mortgage financing

At the same time, financing habits are evolving. Variable-rate mortgages and short-term fixed-rate mortgages of two or three years are gaining popularity, both for first-time homebuyers and for those renewing an existing loan. “The variable rate has been the most popular choice,” explains Tania Bourassa-Ochoa. “For some buyers, it offers an attractive discount, while others are counting on a drop in interest rates from the Bank of Canada.”

This search for flexibility is also reflected in refinancing. According to the CMHC, the main reason for refinancing a mortgage in 2025 is no longer home renovations—as was previously the case—but rather to improve household financial health, particularly by consolidating or paying off debts.

	Tips and tricks In this uncertain economic environment, the real estate broker has become a key resource for buyers. Brokers understand the concerns of buyers and are able to guide them toward properties suited to their needs and budget. Whether selling or buying a property, the broker helps clients navigate inflation, rising mortgage interest rates, and changing market conditions.

Evolution of housing types in Quebec

The Quebec residential real estate market is not only changing in terms of prices and affordability, there are also changes in the types of housing. For instance, accessory dwelling units (ADUs) are taking on an increasingly important role.

According to Guillaume Lessard, Visiting Professor, Faculté de l’aménagement, Université de Montréal, and researcher at the Observatory Ivanhoé-Cambridge on Urban and Real Estate Development, ADUs are growing in popularity. They are driven both by the need for affordable housing and by recent regulatory changes.

What is an accessory dwelling unit?

An ADU is a second residential dwelling built on the same lot as the primary residence. It can take the form of a tiny house in the backyard, a basement apartment, or an addition to the main building.

Unlike a tiny house, an ADU is not considered an independent residence. As there is no legal subdivision of the lot, it remains linked to the main residence.

New ADU regulations in Quebec

Two recent laws are helping to regulate and facilitate the integration of ADUs into Quebec’s real estate landscape. Bill 16 makes it impossible to request a referendum when a municipality adopts an ADU bylaw. However, public consultations can still be held to hear from residents.

Bill 31 authorizes the addition of an ADU attached to a main residence throughout the province. For Guillaume Lessard, this measure is advantageous for households wishing to build an intergenerational home but who were previously unable to do so.

“The rules, however, are not uniform across Quebec municipalities,” the expert points out. “Each one has its own definition, often based on the size of the main building, lot size, and number of accessory buildings allowed.” Generally, regulations permit an ADU of between 40% and 70% of the main building’s floor area.

Trends in ADU construction

The construction of an ADU is often part of an intergenerational strategy. For instance, a dual-income couple, limited in their purchasing options by rising prices, may partner with a pre-retired or retired parent to jointly finance a real estate project. This arrangement allows them to pool resources to better meet their needs. It is also a suitable solution for aging individuals who wish to delay moving into a private seniors’ residence (PSR).

For others, an ADU is primarily an investment. In areas close to public transport, a hospital, or a university, renting out an accessory unit can generate attractive income. This trend, well established in tight real estate markets such as Toronto, Vancouver, and Edmonton, is beginning to emerge in Quebec.

Although this type of housing has been around for some time, it remains relatively new in single-family home neighbourhoods. For the time being, financial institutions offer few mortgage products tailored to households wishing to build an ADU.

	Tips and tricks For real estate brokers, staying informed about ADU regulations and trends is a strategic advantage. Knowing the policies of the municipalities they serve helps them better guide their clients. These may be buyers looking for affordable housing, families interested in an intergenerational home, or investors betting on residential urban densification.

Legal issues related to withdrawal after an inspection

In a competitive real estate market, certain practices, which sometimes are not consistent with existing rules, are becoming more common. This is the case with a withdrawal after an inspection. Isabelle Sirois, a lawyer specializing in real estate and real estate brokerage law, notes that this situation is occurring more frequently, even though it raises significant legal issues. She points out that the pre-purchase inspection is a crucial step in securing a transaction, but that it should not be used as a pretext to cancel a promise to purchase without a valid reason.

How can you avoid a withdrawal after an inspection?

The first step in avoiding an unnecessary or abusive withdrawal is to thoroughly understand the findings of the pre-purchase inspection. “The buyer must carefully read the report and ideally discuss it with the inspector, who can highlight the important points,” explains Me Sirois.

It is also important to understand that the inspection report, especially for an older home, often lists a long series of items to monitor. This does not mean the property has major defects. In many cases, these are simply preventive maintenance issues.

The role of the real estate broker at this key step

For a real estate broker, the inspection report is a strategic support tool. It allows them to better inform and advise their client whether they are the buyer or the seller. Me Sirois also stresses the importance of brokers being present at the pre-purchase inspection whenever possible, as some details or observations are often shared verbally by the inspector and do not necessarily appear in the written report.

When can a buyer legally withdraw?

Withdrawing from an offer after inspection is only possible under specific circumstances. The issue must be significant, affect the property’s value, and be costly to repair. It should not be part of normal maintenance nor something that could have been foreseen at the time the promise to purchase was signed.

If the inspector recommends additional tests—such as a pyrite or air quality test—the buyer shouldhave received the findings before exercising their right to withdraw.

In this context, the declarations by the seller are very important: “Since this form was introduced in 2002–2003, we have witnessed a complete reform of real estate law,” notes Me Sirois. With this form, the seller discloses essential information about the property’s condition, which helps inform the buyer while protecting both parties. Thus, anything that is clearly stated in the seller’s declaration prevents withdrawal after inspection.

Negotiating after inspection: a choice, not a right

Negotiating after a pre-purchase inspection is an option, but not an obligation. The buyer may attempt to renegotiate the price or request repairs, but the seller is not obliged to accept. Conversely, a seller may offer adjustments or a price reduction, but the buyer is free to decline.

	Tips and tricks To effectively support their clients, brokers must provide all relevant information about a property, clearly explain the role and scope of a pre-purchase inspection, and prepare buyers for a certain level of uncertainty. This enables buyers to determine whether the presented property meets their needs.

Transforming current residential real estate market challenges into opportunities

Currently, the Quebec residential real estate market is facing a number of challenging issues. With the rising cost of living straining household budgets, new trends in housing types, and legal issues such as withdrawal after inspection, there are several realities to navigate.

However, these challenges also come with their share of opportunities and the need to adapt purchasing strategies, explore innovative housing options, and, above all, to partner with competent professionals. In this ever-changing environment, the real estate broker plays a key role in helping buyers and sellers successfully achieve their real estate goals under the best possible conditions.

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