Income properties: capital is flowing back, and Longueuil leads the South Shore

For a year now, the question I hear most is whether the residential market will slow down. The real story of 2026 is happening somewhere else. Capital is flowing back into income property, and it's choosing the South Shore. Longueuil just posted the strongest investment growth of any submarket in the Montreal region. Here's how to read that turn if you own or are eyeing a rental building in our area.

Multi-family is the market's anchor again

Let's start with the Greater Montreal picture. According to Altus Group, commercial real estate investment reached $5.7 billion in the first half of 2026, up 38% year over year. Part of that jump reflects a very weak start to 2025, but the recovery is real. Capital is being redeployed, and it's targeting the asset that produces steady income.

Multi-family is the heart of it. On its own, the sector attracted nearly $2.9 billion, half of the total invested, up 30% year over year. The Island of Montreal keeps the top spot at $1.9 billion. But it's the suburbs moving fastest, and the South Shore is out front.

Longueuil leads, and the numbers are clear

Here's the figure that should hold your attention. Multi-family investment volume in Longueuil jumped 221% year over year, reaching $290 million. That's the strongest growth of any submarket Altus tracks in the region. Over the same stretch, Laval fell 19%, to $203 million. Capital isn't scattering at random. It's concentrating on the South Shore, and Longueuil is the tipping point.

That doesn't surprise me. Longueuil offers exactly what an investor wants in 2026: a solid tenant base, entry prices that are still more reasonable than on the Island, and a transit network that holds value over the long run. Add Brossard, Saint-Hubert and Boucherville around it, and you have a territory where a well-placed building leases fast and re-leases without trouble.

Returns, borrowing costs, and the gap between them

Let's talk return numbers. According to CBRE, multi-family cap rates in Montreal sit around 4.25% to 4.5% for a quality building, and a bit higher for the small plex, often between 4.5% and 6% depending on the submarket and the condition of the building. Meanwhile, the five-year fixed mortgage rate runs around 4% to 5% depending on the borrower. The gap between what a building yields and what money costs stays thin. That's the reality to look at squarely before you buy.

This is where rate stability changes everything. On September 2, the Bank of Canada held its policy rate at 2.25%. Altus notes that this hold anchored borrowing costs, stabilized five-year bond yields, and narrowed the gap between what sellers ask and what buyers offer. In other words, both sides are agreeing on value again. For anyone running a five-year plan, that predictability is worth a lot.

The financing structure does the rest. CMHC's MLI Select program is still available and, on an eligible rental building, allows more favourable financing and a lower down payment. It's often what turns a thin gap into a workable deal. I laid out how MLI Select works and the state of the South Shore rental market in two recent pieces.

What this means for you

• You own an income property on the South Shore: your asset is probably more sought-after today than it was a year ago, especially in and around Longueuil. Before you renew your mortgage or think about selling, get your building's real value established, along with the gap between your current rents and the market. It's that gap, more than the sticker price, that decides what your building is worth.
• You're looking to invest: the window is good, but it demands discipline. With a thin gap between yield and borrowing cost, every rent dollar counts, and an MLI Select structure can make the difference. Aim for location and lease quality before the discount. A well-placed building in Longueuil or Brossard defends itself better than a bargain in the wrong spot.
• You're weighing the Island against the South Shore: the numbers settle it. Entry prices are lower here, rental demand is solid, and institutional capital is already validating the area. This isn't the suburbs by default anymore. It's a deliberate investment choice.

I work both residential and commercial, and the income property sits right where the two meet. That's where I can be most useful to you on the South Shore. Want to know what your building is worth or assess a purchase? Request a free evaluation or write to me directly. I answer myself, every time.