What Rent Increases to Expect in 2025 in Quebec?

Will the record-breaking rent increases in Quebec over recent years continue to affect those renewing their leases in 2025? Let’s evaluate this based on the latest economic estimates and market trends.

Rent increases in 2025: by the numbers

In January 2024, the Tribunal administratif du logement recommended a base increase of 2.8% on average for unheated rentals and 3.2% for rentals heated by electricity.

For 2025, preliminary estimates predict an average increase of approximately 4.7% for both heated and unheated rentals, considering municipal tax hikes.

For example, in Montreal, property taxes will rise by 5.1%, representing a 0.8% increase compared to 2024.

Other factors influencing rent increases include:

• Fluctuations in insurance premiums;
• Renovations or major works carried out in the previous year, which could result in a 6.6% increase.

Table 1: applicable percentages for rent increase calculations

*These applicable percentages are not average rent increase estimates.
Source: Tribunal administratif du logement & Association des propriétaires du Québec

Each year, the Tribunal administratif du logement makes a rent increase calculation tool available. This tool is simple and effective, helping to facilitate negotiations between tenants and landlords. While it does not account for specific circumstances like the introduction of new services with additional expenses, it includes several factors:

• Vacant units in the building;
• Taxes and insurance;
• Operating expenses for existing services;
• Major expenses, such as those related to building renovations and repairs.

The tool for calculating 2025 rent increases and the applicable percentages issued by the Tribunal administratif du logement will be available online starting January 15, 2025.

Recent rentals price statistics

In 2024, the annual rent increase was 10.9%, with an average monthly rent of $1,977.

The rent increases were more significant in Montreal and Quebec City, relatively speaking.

For example, a one-bedroom apartment in Montreal averaged $1,805, reflecting a 13.9% increase compared to 2023. A 4½ apartment averaged $2,278 per month, a 5.6% increase.

In Quebec City, one-bedroom apartments saw a 14.5% increase, with an average rent of $1,319. A 4½ apartment cost at least $1,743, a 10.9% increase from 2023.

In summary, housing costs have seen significant and consistent increases, a trend noted by experts.

When should the 2025 rent increase notice be sent?

While the exact percentages of 2025 rent increases are not yet known, it is crucial to be ready to send the notice to tenants within the required timeframe.

Rent increase notices must be sent 3 to 6 months before the lease ends for a 12-month lease. For a lease ending on June 30, the notice must be sent by March 31 at the latest.

Once the lease modification request is received, the tenant has 30 days to respond to the landlord. Although amicable agreements are possible, the TAL may set the rent amount when an agreement cannot be reached.

However, properties built within the last 5 years are not subject to this regulation, and tenants must vacate at the lease's end if no agreement is reached. Read our article on Clause F for more information.

Still a housing shortage in 2025?

Although the Canadian government continues to implement its national housing policy and Quebec pursues efforts such as the Allocation-Logement program, housing shortages are expected to persist until 2026, according to recent forecasts.

Government programs are beginning to show effects in 2025, but rent increase stabilization in Quebec is not expected until 2026.

While this situation may benefit current landlords, they continue to face constant increases since 2022 (property taxes, mortgage rates, energy costs, etc.), often forcing them to pass these costs onto tenants.

Key interest rates and average prices in 2025

The key interest rate remains stable in 2025, with potential decreases projected for mid-year. Inflation shows signs of slowing, providing some economic relief.

While the first months of 2025 are marked by economic uncertainty, prospects suggest gradual improvement as the year progresses.

That said, rents continue their upward trend. Experts predict average increases between 5% and 8% for 2025.

Here are the projections for average monthly rents in Montreal and Quebec City:

These projections are based on recent rent trends, current economic conditions, and the impact of ongoing housing programs.

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