Cap rates by city / Montreal
Montreal cap rates in 2026
Apartment buildings in Montreal traded at cap rates of 4.25% to 4.75% in CBRE's second-quarter 2026 survey, 3rd lowest of the 13 Canadian cities CBRE surveys. Here is what sits behind that number, what CMHC says about vacancy and rents, and what a building is worth at the local yield.
Apartment cap rate
4.25% to 4.75%
CBRE, Q2 2026, Class A to B
Vacancy rate
2.9%
CMHC, October 2025
Average two-bedroom rent
$1,346
CMHC purpose-built, October 2025
Rent growth, 2025
7.2%
CMHC, two-bedroom, year over year
Run a Montreal building through the calculator
Preloaded with a six-unit building at Montreal's CMHC average two-bedroom rent, the city's vacancy rate, and generic expense assumptions ($1,800 tax and $600 insurance per unit, 8% maintenance, 5% management, $900 utilities per unit). The price is set so the building lands at the middle of the local range. Replace every number with your own.
Property & income
What you would actually pay, not the assessment
All units combined
Operating expenses (annual)
Of gross rent; 5–10% is typical
0 if self-managed
Condo fees, snow, lawn care
Your market
What similar properties trade at in this market
Cap rate
4.50%
$61,703 NOI on $1,371,000
Cap rate deliberately ignores financing: it is NOI divided by price, so you can compare properties regardless of how each buyer pays. The implied value inverts it: the price at which this NOI would hit your target cap rate. Useful as a negotiating anchor.
What the same building is worth across the range
The six-unit example above produces $61,703 of net operating income a year. Value is NOI divided by cap rate, so a half-point move in the market's cap rate changes the price by more than most renovations would:
| Cap rate | Building value |
|---|---|
| 4.25%low end | $1,451,835 |
| 4.5%middle | $1,371,178 |
| 4.75%high end | $1,299,010 |
Per unit: $241,973 at the low end to $216,502 at the high end.
Why Montreal trades where it does
Montreal is Canada's biggest plex market, and the stock ranges from renovated Plateau triplexes to unrenovated 1960s walk-ups in the east end. Rents are the lowest of any large Canadian city, which keeps prices per unit low; the survey range of 4.25% to 4.75% is narrow because it tracks institutional-grade buildings, and small plexes trade well outside it in both directions. Quebec's rent-setting regime, where the TAL can fix a rent a tenant refuses, is priced in as a limit on how fast in-place rents can catch up to market.
Vacancy, rents and the 2026 outlook
Montreal had the fastest rent growth of the big markets in 2025: two-bedroom rents rose 7.2% on CMHC's survey, driven by increases on existing leases, while vacancy sat at 2.9%. The 2026 TAL recommendation of 3.1% is well below 2025's 5.9%, so growth on renewals will slow. Turnover rents remain the lever, and Montreal's new 2026 brackets on the welcome tax raise closing costs on buildings above $552,300.
Rent rules in Quebec
Quebec has no fixed cap. The Tribunal administratif du logement (TAL) recommends an increase each year from a formula of CPI, taxes and insurance; for leases renewing April 2, 2026 to April 1, 2027 the base recommendation is 3.1%. Tenants can refuse and have the TAL set the rent. That rule sets how fast in-place income can grow, which is why two buildings with identical rent rolls can trade at different cap rates depending on how far below market their tenants sit.
Cap rate against your mortgage rate
At a 4.5% cap rate, a mortgage costing more than 4.5% makes leverage work against you: every borrowed dollar earns less than it costs until rents grow. In Montreal that is roughly a wash at 2026 mortgage rates, so cash flow depends on the down payment and how far below market the rents sit. Put the same building through our rental property calculator to see the cash flow with the Canadian semi-annual mortgage formula.
Frequently asked questions
What is a good cap rate for a Montreal plex?+
Institutional apartment buildings traded between 4.25% and 4.75% in CBRE's Q2 2026 survey, with high-rise Class A up 12 basis points in the quarter, one of only two moves in the country. A duplex or triplex bought by an owner-occupier often pencils to 4% or below because the buyer is paying for a home plus income. A pure investment plex under 4.5% needs a rent-increase story to justify it.
Why are Montreal rents so much lower than Toronto's?+
Decades of rent regulation through the TAL, a large stock of older plexes, and slower price growth until 2020 kept rents low. The gap is closing: Montreal two-bedroom rents rose 7.2% in 2025 against 3.5% in Toronto, but at $1,346 versus $2,034 the level is still a third lower.
How does the TAL affect rental income in Montreal?+
A tenant who refuses a rent increase can have the TAL set the rent using its formula, so landlords cannot simply impose market rent on renewal. The 2026 recommended base increase is 3.1%. Buildings with renovations or higher taxes can justify more, but every increase must be defensible under the formula.
How Montreal compares
| City | Cap rate | Vacancy |
|---|---|---|
| Vancouver | 3.5% to 4.75% | 3.7% |
| Toronto | 3.85% to 5.15% | 3% |
| Montreal | 4.25% to 4.75% | 2.9% |
| Victoria | 4.25% to 5% | 3.3% |
| Winnipeg | 4.5% to 5.25% | 2.8% |
| London | 4% to 6% | 4% |
| Calgary | 4.5% to 5.5% | 5% |
| Halifax | 4.5% to 5.5% | 2.7% |
| Quebec City | 4.25% to 6% | 2.4% |
| Edmonton | 4.5% to 5.75% | 3.8% |
| Ottawa | 4.5% to 5.8% | 3% |
| Kitchener-Waterloo | 4.5% to 6% | 4.1% |
| Saskatoon | 5.25% to 6.75% | 3.3% |
Sources: CBRE Canadian Cap Rates & Investment Insights, Q2 2026 (cap rate summary, high-rise and low-rise Class A to B); CMHC Rental Market Report, October 2025 survey. Survey ranges describe stabilized, professionally managed buildings; individual sales print outside them. Measure your own deal with the cap rate calculator.