Montreal is the hottest real estate market in Canada right now, posting record sales and attracting investors from all over the world. Some people already fear that the growing interest in Quebec real estate will inevitably shoot up the prices and potentially the rents as well. Historically, investors stayed away from the province of Quebec due to political and language issues as well as the famous Regie du Logement, which tends to favour the rights of tenants over landlords.
Why the sudden interest in Montreal properties? Montreal has always been a favorite tourist destination, and now fast becoming a city everyone wants to work and live in! Just like our frigid winters, the average property prices in Montreal are extremely low (when compared to the rest of Canada). In the past 2 years, demand for rental units has surged with the arrival of foreign students, temporary workers and new immigrants. Not to mention, the new mortgage rules have forced many first-time buyers to rent instead of buy. The vacancy rate is so low right now in Montreal, that as soon as you list an apartment for rent it goes right away.
Renters are having a hard time finding long term housing. The short-term rental market has taken over the city of Montreal, and it is a difficult phenomenon to regulate. Despite the new provincial law B67 which took effect on April 15, 2016 as well as subsequent local municipal by-laws, the number of short-terms rentals has skyrocketed, leaving many residents out of a place to live.
Since 2016, countless stories have been reported about tenants being evicted, condo units being used as short-term rentals causing disturbances and even tenants subletting to others without the consent of their landlord. Recently, 13 Little Burgundy residents were evicted following a change of ownership of a 6plex on Notre-Dame St W. The new owners plan to convert the units and offer them on Airbnb as short-term rentals. (CTV MONTREAL 2019)
On April 18, 2018 we heard the story of Andrew Chapman, who found himself surrounded by short-term renters in his 9-unit condo building. Instead of having regular neighbors, there were different people coming in and out like it was a hotel. (CBC NEWS 2018)
Operating short-term rentals in Montreal is legal provided the host abides by the regulations. If this sounds like something you may be interested in, keep in mind the regulations call for permits, certifications, insurances, declaring your revenues to Revenue Quebec and paying the tourism taxes amongst other things. New powers have been given to Revenue Quebec to have inspectors investigate illegal rental units and give out fines between $25 000 to $50 000. Since 2018, 963 warnings were given according to Genevieve Laurier, from Revenue Quebec. (Global News 2019)
If these regulations are not enforced and short-term rentals are more lucrative than the traditional 1-year lease, this business model will not go away. In the short-term, this is a fast-growing industry and going full steam ahead to fill a need, without considering the consequences. However, in the long term if this continues, Montreal will experience a shortage of good quality long term rentals and potential hikes in rents.
Eleni Akrivos is a Chartered real estate broker and President of North East Realties, Real Estate Agency in Montreal. Eleni is a lecturer in the Residential Real Estate Program at College Lasalle and Co-Hosts The Real Estate Show on CJAD AM800 radio every Sunday at 1:00pm. To send her questions or comments please write to firstname.lastname@example.org and visit www.northeastrealties.ca for articles and videos.