IN SHORT
The rise in rents in Québec can be attributed to several factors: increases in property taxes and insurance premiums, maintenance and repair costs, and the imbalance between supply and demand in the rental market. In particular, the high cost of building materials is resulting in hefty bills for landlords. In 2026, the increase continues but begins to level off.
Have you received a notice of a rent increase and are wondering why? Are you looking for an apartment in Montreal and finding that prices seem to keep going up? In recent years, rising rents have made headlines. But why are rents going up? There are two main factors behind these increases: costs that landlords must absorb and the rental market. We’ll explain it all in simple terms.
A Reflection of Actual Costs
First, let’s debunk a myth: not all landlords are money-grubbing individuals looking to line their own pockets. Rent increases primarily reflect an economic reality: managing and maintaining a building is becoming increasingly expensive. Landlords must cover several rising costs, including property taxes, insurance, and maintenance and repair expenses.
1. Property Taxes
Each year, municipalities set their tax rates based on their budgetary needs. Property taxes enable cities to fund various public services (police and fire departments, public transit, urban planning, waste collection, etc.), as well as to repay debt.
These taxes vary by city and borough. For instance, in Montreal, the average tax increase is 3.8%. For landlords in Rosemont–La Petite-Patrie and Verdun, this increase reaches 5.4%!
This has a direct impact on landlords, who are forced to raise rents accordingly.
2. Insurance
The climate crisis is putting significant pressure on insurance companies. Insurers are facing losses, which translates into higher premiums for homeowners.
According to Statistics Canada, home insurance costs rose by an average of 31% between 2021 and 2025. This increase is even more pronounced in provinces such as Alberta and British Columbia.
3. Maintenance and Repair Costs
A rental property requires constant maintenance: roofing, plumbing, insulation, windows, and so on. These investments are unavoidable to keep the units safe and livable. When a landlord carries out major renovations, a rent increase is a legitimate way to recoup those costs.
However, renovations, including upgrades to meet current standards, come with a higher price tag than before: since 2017, costs have risen by 53%, largely due to material prices and labour shortages.
In the case of a residential tower, for example, the many amenities come at a cost to landlords, who must cover their maintenance.
4. The Cost of Real Estate
Rising construction material prices obviously have a direct impact on the cost of new buildings. In Québec, the cost of building construction has risen by 71% since 2017, according to Statistics Canada!
Supply and Demand: Market-Driven Rent Increases
Beyond operating costs, rents are also subject to market forces. Population growth is accelerating, and the supply of affordable housing remains insufficient. Vacancy rates are very low in many parts of Québec, particularly in Montreal. This creates a situation where demand exceeds supply, leading to higher prices.
A Stabilizing Market
In 2026, rents continue to rise, but the situation is stabilizing compared to previous years. In 2025, the Tribunal administratif du logement (TAL) had suggested a 5.9% increase, whereas the rate is 3.1% in 2026. While this remains a suggestion (and not a cap), it helps to moderate the increases.
This calculation is based on the variables outlined above (taxes, insurance, maintenance costs). However, the TAL is adopting a new calculation method that takes greater account of:
- The Consumer Price Index (inflation)
- The multi-year average
- A more balanced weighting between costs and construction work
Note that in certain cases, a larger increase is permitted, such as when major renovations are underway, the unit is new, or there is a significant increase in municipal or school taxes.
If you are a tenant and receive a notice of rent increase that you believe is unreasonable, know that you have rights protected by the TAL. Any increase exceeding the suggested rate must be justifiable and documented. It is always best to discuss the matter first with the landlord to try to reach an agreement; as a last resort, the rent may be set by the TAL.
Transparency Is Key
At Groupe Accueil, we believe that a harmonious relationship between landlords and tenants is based above all on transparency. If we propose a rent increase, it is because it reflects actual costs – and we are always available to discuss it with you.
Do you have questions about your lease or your rights when it’s time for renewal? Don’t hesitate to ask your questions to your future landlord.
