Real Estate Trends and Developments 2024

Written by Isabella Tamilia and Alexander Rigante

To read the article in the Chambers Guide, click here.


In 2023, the Quebec real estate market witnessed a deepening of recent trends rooted in the post-pandemic environment. High interest rates, hefty construction costs, and the introduction of legislative measures on all government levels in an attempt to curb the housing crisis, are some of the trends and challenges that are expected to persist throughout 2024.

Montreal’s real estate market has proved to be resilient in this challenging economic environment, having transacted CAD8 billion in volume throughout 2023, 75% of which came from the industrial and multi-family asset class. Strong growth in industries such as e-commerce has driven demand for modern industrial facilities in suburban locations in close proximity to major highways and other means of transportation.

All asset classes reported a setback in transaction activity in 2023, except for industrial, commercial and investment (ICI) land (ie, despite increased land and construction costs) and hotels. Industrial, multi-family and grocery-anchored retail were the top asset classes attracting investors. Office vacancies continued to rise and will likely continue to increase in the short term as the hybrid work environment remains prevalent.

The present article provides an overview of legal trends which have impacted and will continue to impact Quebec’s real estate market in the coming years.

Legislative Updates – Affordable Housing

According to the Canadian Mortgage and Housing Corporation (CMHC), Quebec requires an additional 860,000 housing units by 2030 in order to meet demand and restore affordability in the residential market. The fourth quarter of 2023 saw residential vacancy rates drop to the lowest rate experienced in 20 years. The housing crisis remained a top policy concern for all levels of government throughout 2023. As such, legislative trends for this period remained focused on the implementation of policies to facilitate and incentivise development, and increase the supply and availability of residential housing. This trend is expected to continue to deepen over the coming years.

Bill 31 – housing

Following long-winded consultations and parliamentary debates which began in the fourth quarter of 2023, An Act to amend various legislative provisions with respect to housing (“Bill 31”), was adopted in early 2024 by Quebec’s legislative assembly. The objective of this omnibus legislation is to address core issues related to the ongoing housing crisis, notably by facilitating the increase in supply and tightening the regulatory framework on evictions, rental increases, and lease assignments/subleases. Housing Minister France-Élaine Duranceau was quoted in the press as saying that the rationale for the new law was to “re-establish balance between renters and landlords and increase [the] housing supply”.

Some of the key changes introduced by Bill 31 that have impacted the regulatory framework for residential leasing are as follows:

Eviction compensation

Residential landlords are entitled to evict a tenant for a variety of reasons that are not related to the tenant’s default. However, whereas prior to Bill 31, tenant compensation for eviction was three months’ rent plus reasonable moving expenses, under Bill 31, landlords must now pay tenants an indemnity ranging from three to 24 months’ rent, depending on the number of uninterrupted years that a tenant has leased the premises, plus reasonable moving expenses. Furthermore, landlords are now required to demonstrate, on a balance of probabilities, that an eviction and/or repossession was carried out in good faith, failing which, tenants may recover damages in addition to applying for punitive damages in cases where the eviction and/or repossession is deemed to have been carried out in bad faith.

Rental increases

Procedures regarding rental increases have changed. Landlords are now required to include the maximum rent that they may charge for five years following the date on which the unit is ready to be leased (if the unit forms part of a new build or a building that has recently undergone a change of use). Punitive damages may also be claimed by tenants in contexts where a landlord intentionally: (i) omits to notify a new tenant of the lowest rent paid; (ii) omits to notify a new tenant of the last rent paid if the unit was vacant for more than 12 months; and/or (iii) falsifies information provided to the tenant with respect to items (i) and (ii).

Lease assignment

Traditionally, where a residential tenant requested the landlord’s consent to assign the lease, the landlord could not withhold its consent without a “serious reason” (as such concept is used in the Civil Code of Quebec). Under Bill 31, landlords now have the right to withhold their consent to a proposed lease assignment for a reason other than a serious reason, without the necessity to provide any justification. In such a case, the lease is cancelled (resiliated) on the date of assignment indicated in the tenant’s notice, at which point the tenant is released. Furthermore, since Bill 31 now prohibits tenants from assigning or subletting for a profit, the tenant has nothing to gain financially. In modifying the landlord’s right to refuse its consent to a reasonable grounds standard, the landlord is given the option and not the obligation to terminate the lease, without having to justify its decision. Thus, Bill 31 creates a balance between the legitimate interests of both the landlord and the tenant.

In addition, Bill 31 allows for municipalities to temporarily override existing by-laws and regulations related to zoning and urban planning to fast-track the authorisation and construction of projects which contain a social/affordable housing and/or student housing component. Municipalities with a population of 10,000 or more and a housing vacancy rate of less than 3% are also granted the power to authorise housing projects which may deviate from the zoning and/or urban planning regulations in force.

Bill 31 appears to form part of a wider government approach to the housing crisis. On the federal level, the industry witnessed a renewal of the ban on foreign investment, and the introduction of tax incentives for developers of purpose-built residential housing, both of which will be summarised in the sections below.

Prohibition Act – renewal

In 2022, the federal government passed the Prohibition on the Purchase of Residential Property by Non-Canadians Act (the “Prohibition Act”) with the objective of restricting the purchase of certain residential property in Canada by foreign investors and non-residents. Shortly thereafter, the federal government passed the Prohibition on the Purchase of Residential Property by Non-Canadians Regulations, last modified in March 2023, which brought much-needed clarification to the unexpected implications that the Prohibition Act had on participants in the commercial real estate sector.

On 4 February 2024, the Deputy Prime Minister and Minister of Finance announced the federal government’s intention to extend the existing ban by an additional two years, expiring on 1 January 2027. While critics have argued that this legislation has little practical effect on increasing supply and access to housing, the extension appears to form part of a larger strategy.

Bill C56 – GST Rental Rebate and Groceries Act

The December 2023 adoption of An Act to amend the Excise Tax Act and the Competition Act (“Bill C-56”), also known as the “Affordable Housing and Groceries Act”, witnessed an increase in the Goods and Services Tax Rental Rebate (“GST Rental Rebate”) on new rental housing go from 36% to 100%, while removing existing GST Rental Rebate phase-out thresholds for new rental housing projects. With the announcement of the GST Rental Rebate increase, industry players remain observant to similar fiscal incentives that can be adopted at the provincial and municipal levels. In addition to the GST Rental Rebate, the CMHC continues to provide incentives for the development of affordable rental units with programmes such as the CMHC Flex programme, which offers preferential terms on construction financings.

Bill C-56 also amends the federal Competition Act with the objective of enhancing competition, notably in the grocery sector. The amendments seek to expand the Competition Bureau’s powers of investigation and enforcement related to anti-competitive activities where “one or more persons substantially or completely control a class or species of business throughout Canada or any area of Canada”.  Of particular note, the amendments will expand the scope of Section 90.1 of the Competition Act, providing the Competition Bureau with the discretionary power to seek orders which prohibit agreements or arrangements between and among non-competitors if “a significant purpose of the agreement or arrangement, or any part of it, is to prevent or lessen competition in any market”. Originally, such power was limited to “agreements or arrangements between actual or potential competitors that prevent or lessen competition substantially”. Moreover, the amendments provide for an increase in discretionary administrative monetary penalties for non-compliance to CAD25 million (as opposed to CAD10 million) for initial violations or three times the value of the benefit derived from the abusive conduct or, if that amount cannot be determined, 3% of the offender’s worldwide turnover; and up to a maximum of CAD35 million (as opposed to CAD25 million) per subsequent violation or three times the value of the benefit derived from the abusive conduct or, if that amount cannot be determined, 3% of the offender’s worldwide turnover.

With the amendments coming into force in December 2024, there is considerable uncertainty as to how the Competition Bureau will address the exclusivity, use restriction and radius clauses contained in commercial leases, which are essential to grocery and other anchor retailer decisions to locate a store within a given development. While the amendments are intended to target household-name players in the grocery industry, they are applicable across the board. As such, it is expected that landlords and tenants affected by the amendments will pay close attention to the evolution of this matter and revisit such clauses in their leases to minimise their exposure to the significant penalties proposed.

Legislative Updates – Miscellaneous 

Property taxes on data centre equipment

In Quebec, municipalities are now entitled to levy property taxes on certain data centre equipment. Recent jurisprudence has shown the courts granting a large interpretation to the concept of “movable property that is permanently attached to an immovable” in Section 1 of the Act respecting municipal taxation (the “ARMT”). In Ville de Montréal v Société en commandite Locoshop Angus (for which the application for leave to appeal to the Supreme Court was dismissed, making the Court of Appeal’s decision final), the Court of Appeal clarified that, movables such as equipment for hosting computer servers do not need to be physically attached to the ground to be considered “permanently attached”. The Court found that a movable is “permanently attached” if: (i) it cannot be removed without being dismantled or without breaking down the building component in which it is placed; or (ii) an intellectual connection binds it to the immovable in which it is located. This ruling has effects beyond the data centre industry, and also affects industries such as the telecoms sector. For instance, in Ville de Québec v Vidéotron ltée, the Court of Appeal of Quebec considered Vidéotron’s wireless telephone equipment to be physically attached to the concerned immovable and thus to be calculated in the immovable’s municipal evaluation. The court’s ruling is particularly important for Quebec as the province is one of Canada’s largest hubs for data centres (eg, Amazon, Microsoft, Google and IBM), video game developers, visual effects studios and artificial intelligence research, namely because of the province’s colder climate as well as its affordable and easily accessible energy from Hydro-Québec’s electrical grid.

The ruling is expected to increase costs for both landlords and tenants in the technology sector, since the sophisticated equipment used has significant monetary value which will increase the property value and thus, property taxes. The ruling has been criticised as being a deterrent for business technology companies to remain and/or set up shop in Quebec. Note that the ARMT excludes the equipment used for the industrial, manufacturing and agricultural sectors from a property’s municipal evaluation, an exclusion which the technology sector argues should also benefit them. Various sector groups have called on the Quebec government to amend the ARMT in this respect.

Bill 22 and Bill 39 – land use, zoning and expropriation

In November 2023, An Act respecting expropriation (“Bill 22”) was passed by the Quebec legislative assembly. Bill 22 is particularly noteworthy as it introduces a new framework regarding expropriations with the objective of streamlining critical infrastructure projects and amending compensation rules to the detriment of expropriated parties.

In addition, the real estate industry saw the Act to amend the Act respecting municipal taxation and other legislative provisions (“Bill 39”) passed in December 2023. Bill 39, among other things, provides municipalities with the power to impose a property value-based tax on buildings containing vacant or under-used residential units – another attempt to increase housing supply amid record low-vacancy rates. Bill 39 also amends the Act respecting land use planning and development, whose amendments prevent expropriated parties from obtaining due compensation in certain contexts of disguised expropriations.

These two pieces of legislation are expected to significantly shape the real estate landscape in the coming years, readers are invited to refer to De Grandpré Chait’s municipal group’s September 2023 Chambers contribution to learn more: REAL ESTATE: An Introduction to Quebec Law | Chambers and Partners.

Bill 34 – back to in-person closings

In April 2020, as a means of ensuring the sound administration of justice in light of the COVID-19 pandemic, the Quebec Minister of Justice authorised notaries licensed to practice in Quebec to take signature of notarial acts (such as deeds of sale, deeds of hypothec, wills and declarations of co-ownership) remotely on recognised platforms such as Microsoft Teams, using approved technological means to obtain digital signatures (eg, Consigno Cloud). The decree was renewed in August 2021, 2022 and 2023, which many industry players viewed as effectively modernising notarial practice by facilitating the remote closing of real estate transactions in Quebec. However, on 24 October 2023, the Quebec government passed an Act to modernise notarial practice and promote access to justice (“Bill 34”) by making digital signatures (ie, via phone, tablet or computer) and the physical presence of the parties mandatory, save for exceptional cases. The change was adopted to ensure the protection of the public during a period when the market saw an increase in title and mortgage fraud. Some members of the legal community responded negatively to Bill 34, considering the measures to be regressive compared to the existing efficient and modernised way of transacting in Quebec. However, several influential notarial groups, such as the Association professionnelle des notaires du Québec and the Chambre des notaires have actively supported and welcomed the adoption of Bill 34.

ESG Emergence in Quebec Real Estate

Throughout 2023, environmental, social and governance (ESG) considerations remained central to decision-making by various Quebec real estate industry stakeholders and continued to affect key aspects of real estate projects, including leasing, development, financing and legislation. It is interesting to note that while ESG standards in Europe are derived from regulation, ESG considerations in Quebec appear to stem from investors and major commercial developers. Current Quebec ESG leaders tend to be companies with assets held globally, including regions where ESG rules are stricter or mandatory.


The space that a large corporate tenant chooses to lease has the potential to directly or indirectly impact its ESG commitments. Accordingly, commercial tenants are seeking more energy-efficient spaces in which they can satisfy their ESG commitments to their stakeholders. This, in turn, will reduce their energy consumption and operating costs. For their part, with commercial buildings being among the biggest energy consumers, landlords are trying to attract and retain tenants by using sustainable materials and appliances (ie, upgrading heating, ventilation and air-conditioning systems, which reduces energy consumption) and by changing their operational procedures which, in turn, will make their buildings more marketable.

As a result, throughout 2023, there has been a significant rise in “green leases” in Quebec. These promote improved building energy consumption by incorporating sustainability into key clauses of a lease, and are intended to encourage collaboration between landlords and tenants to achieve sustainability-focused results. To serve as a roadmap for landlords and tenants, the Building Owners and Managers Association (BOMA) created a guide on green leases so parties can collaborate on sustainable practices, providing clauses to which they can refer during lease negotiations. Moreover, as technology is rapidly evolving and new opportunities are arising to improve buildings and reduce energy consumption, the green lease trend is expected to accelerate in 2024.


Sophisticated real estate lenders and investors are increasingly incorporating ESG factors when evaluating the financial risks involved in a real estate project, which is now commonly known as “sustainable” or “green” financing or investing. It has been noted that Quebec lenders are increasingly integrating ESG criteria into their due diligence process and working with borrowers towards achieving sustainability throughout the duration of the loan.

Montreal is establishing itself as a global centre for green financing, backed by a financial and business community with a strong ESG focus. On the financial side, Desjardins, a Quebec-based institutional lender, has recently introduced incentives such as cash back to encourage companies to invest according to ESG criteria and has committed to providing training in sustainable development to its employees, advisers and professionals to support transparency and reporting in sustainable finance. Key Montreal-based players with a growing global presence, such as National Bank, iA Financial Group, BDC and Fiera Capital, are also increasing their focus on green financing.

On the developer side, with the first phase nearing completion, the Royalmount project, the largest private development in Quebec, is one of the only 100% carbon-neutral mixed-use developments in Canada as well as the largest LEED Gold-certified retail project in Canada. The original Royalmount project was modified to add more housing and green space. Examples of Royalmount’s sustainability efforts include the use of geothermal energy and a rainwater recovery system, white or vegetation-covered roofs, and the installation of 148 electrical charging stations in the underground parking lot, which significantly exceeds the minimum number required for LEED certification. The financing of the first phase of Royalmount was completed in January 2023 by a syndicate of lenders, led by Bank of Montreal, as administrative agent.


In conclusion, despite economic challenges, the Quebec real estate market has proved once again to be resilient throughout 2023.