Toronto vs Montreal Condo Market

If you are moving to Toronto coming from a city like Montreal, you’ll soon learn that the Toronto real estate market is just insane. For those of you going east on the 401 to Montreal, to invest in a property or move there…You are discovering the relative real estate deals that can be found in Montreal.

I’m not a real estate agent or broker or have any affiliation to any real estate agency. I’m just a guy with a normal full-time job in the market looking for a place to live (ie: low to mid-range condos); and I’ve seen and learned a lot in the past few months. So I decided to share my knowledge, and just put my two cents out there. These are all personal opinions and observations, so don’t be upset!

My experience comes from recently visiting approximately one hundred condos in the Greater Toronto Area of all prices, ages, shapes and sizes. I’ve also seen many of the new Montreal condo projects that are being built in the past few years.

1. Prices: Toronto condos are just waaaay more expensive than Montreal. So high that I don’t even comprehend how new people moving here can afford living here alone. Unless everyone has roommates, or lives with their significant other (and/or their parents). Is everyone making over $120K in salary per year in Toronto? Maybe that’s what you need to do…ask for a raise. Not only that, but transfer fee taxes are higher, condo fees are higher and utility costs are higher (check out this link: Hydro Quebec has the cheapest electricity in Canada). Even high-speed internet costs more than in Montreal.
2. Price Appreciation: In Toronto, condo prices increase like nowhere else in the world. The supply and demand is just not balanced. A building with 400 units might just have one or two units on sale at any given time (low supply); that’s not a lot of choice for all the new people/buyers moving to Toronto (high demand). In Montreal, condo prices have finally begun to slowly rise in more popular areas, but still stagnant in many parts of town.
3. Cash Flow: If you buy a 1-bedroom downtown condo, put down a 20% downpayment, and plan to rent it out in Toronto; you will likely be cash flow negative. The rent generated will most likely not even cover your mortgage costs. In Montreal, I’ve seen condos where the rent covers your mortgage, taxes AND condo fees.
4. Rental Market: Newer Toronto condos are hard to come by, and they can often rent out in hours (people have to fight/outbid each other to rent a place sometimes)…In Montreal, condos in hot areas (eg: downtown) during peak season can take a few days to rent, or months in midtown Montreal areas (even if next to a metro station). Montreal is also very anti-Airbnb.
5. Build Quality: This might ruffle some feathers, but in my opinion the finish in Toronto condos is lacking. Maybe it’s because there’s less competition (and the demand is so high) that Toronto condo builders cut build costs anywhere they can? I’m not sure, but this is a common theme I’ve seen in many (not all) newer Toronto condo buildings with ~400 units: popcorn ceilings, no ceiling light fixtures, no swimming pool (I don’t even like to swim), and short ceilings. In Montreal, for your dollar you’ll almost surely get something with a better finish, located downtown near a metro and at a lower price.

In the end, Toronto low to mid-range condos just feel to be of a lower quality (small details) and yet you will end up spending 50-100% more than a comparable Montreal condo. But the job market and flow of people coming to Toronto is what keeps it afloat. Imagine if Amazon decides to set up their new headquarter in the GTA…It would ignite a new real estate GTA boom. Scary.

Toronto looks peaceful, if you ignore the bidding wars…