Should you rent or buy in Montreal?

We’re continuing our series on whether it’s a better deal to rent or buy in Canada’s major cities. Check out previous posts on Toronto, Vancouver, and Calgary. Today, let’s tackle the largest city in La Belle Province, Montreal.

Montreal is a great city. It’s home to approximately 4,839 tons of poutine, a stadium that was only nice for about 20 minutes after it opened, and all the history you can shake a stick at. Like I said to my girlfriend when we visited in 2013 (she’s from the city, originally), it’s like there’s a little bit of Europe in Canada. I can understand the appeal of living there.

Like with the other cities, we’ll look at renting and buying a condo and a house, with an emphasis on the whole cost of ownership -- including things like condo fees and property taxes.

Condos

Like just about every other city in Canada, Montreal has experienced a pretty big condo boom over the last decade. That’s good for people who want to live downtown, but bad news for people who like views that aren’t into their neighbor’s living room.

Metropol is one of those hip new developments, located on the corner of René Lévesque Boulevard and Saint-Denis Street. I was able to find a one-bedroom unit for rent in the complex for $1,250 per month. Hydro is not included, and neither is an indoor parking space. But it’s close to the metro, so you probably wouldn’t even need a car.

The building is so new that virtually identical units are selling for $243,464, which seems like an awfully specific number. They’re new units, which means a buyer would be responsible for HST, which adds another $10,000(ish) onto the price. Let’s call it a purchase price of $250,000, because figuring out HST rebates isn’t my idea of fun.

The mortgage payment alone comes out to $1,159 per month once you factor in the down payment and CMHC fees, assuming a 3% mortgage over a 25-year amortization. But once you add in the condo fees ($142 per month) and the taxes (which we’ll estimate at $100 per month), you’re looking at $1,401 per month as a cost of ownership. Renting wins, by about $150 per month.

Houses

To find an actual house in Montreal, we’ve got to go out to the suburbs. I chose Laval, just because it sounds like a cool place.

After a bit of searching, I found two houses on the same street, one which was for rent and the other for sale. The rental was a three-bedroom, two-bathroom, house for $1,500 per month.

The very similar house just down the street also has three bedrooms and two bathrooms, which is listed for $389,000. Let’s be a little conservative and assume you can pick it up for $370,000, because you are a negotiating superstar. There’s no HST on this property because it isn’t brand new.

Including CMHC fees and a 5% down payment, and assuming a 3% fixed 25-year mortgage, the payment alone on this property would be $1,716 per month. Add another $250 for property taxes, and we’re flirting with $2,000 per month to own the place compared to $1,500 to rent the equivalent house down the block.

Conclusion

Like we’ve almost universally found throughout Canada’s largest centers, it’s cheaper to rent both a condo and a house in Montreal. If you feel the need to live that close to Carey Price, I recommend renting a place.

If you're thinking of moving and you're deciding whether to rent or buy. Use our mortgage tool to find great deals on interest rates in your area.

Image Courtesy of Dollar Photo Club