A notable trend is the decline in the number of Quebecers relocating each year. Data from the Institut de la statistique du Québec indicates a sharp decrease from 944,600 movers in 2002 to only 658,300 in 2023. This reduction is largely attributed to the skyrocketing housing costs, which have created significant barriers to mobility. According to Francis Cortellino, a market economist at the Société d’hypothèques et logement (SCHL), the housing market’s difficulties are a critical factor behind this trend.

For those who do move, the financial burden is substantial. A recent survey by Léger Marketing revealed that renters in Montreal faced an average rent increase of 24% upon relocating in 2024. This rise in costs not only affects affordability but also forces many to compromise on the quality of services and amenities. The director of housing for Vivre en Ville, Adam Mongrain, notes that this situation is pushing residents to delay moves as long as possible to avoid the deteriorating conditions associated with higher rents.

The impact extends beyond renters to homeowners as well. Many property owners in Quebec are staying put, even when it would make sense to downsize. The high cost of moving to a smaller, more manageable property discourages sales, leading to a stagnation in the market. This trend further exacerbates the housing shortage and drives up prices, as fewer properties become available for new buyers.

The housing crisis in Quebec has broader implications for the commercial real estate sector. Limited mobility among residents affects local economies, reduces demand for commercial spaces, and can stifle business growth. With fewer people moving into new areas, commercial developers may find it challenging to attract tenants to new projects, potentially leading to higher vacancy rates and lower rental incomes.

Across Canada, the situation is similarly strained, particularly for new immigrants. A poll by the Angus Reid Institute found that nearly 40% of recent immigrants are considering moving to another province or leaving the country due to housing costs. This trend is particularly pronounced among younger Canadians, with 42% of 18-24 year olds contemplating relocation. 

For Quebec, this interprovincial migration trend could result in a talent drain, as individuals and businesses seek more affordable locations. This shift might reduce the pool of potential commercial tenants and impact the local labor market, further complicating the economic landscape.

Adding to the complexity, the Office of the Superintendent of Financial Institutions (OSFI) recently delayed implementing a higher capital floor level for banks. This decision, initially planned to align with global standards set by the Basel Committee on Banking Supervision, has been postponed to prevent putting Canadian banks at a competitive disadvantage. The delay is intended to maintain lending volumes and consumer options, which are crucial for supporting economic stability.

For the commercial real estate market, this regulatory delay offers a temporary reprieve. Maintaining current lending practices ensures that financing for commercial projects remains accessible, supporting ongoing development and investment. However, the eventual implementation of stricter capital requirements could increase borrowing costs and limit financing options, potentially slowing down market activity.

How will these trends shape the future of Quebec’s commercial real estate market? Will the province’s housing challenges continue to drive migration and affect local economies? We invite you to share your thoughts and strategies on navigating these complex issues in the comments below.

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