Average Cap Rate by Area on Montreal's North Shore (2026)
Capitalization rate (cap rate / TGA) and Gross Rent Multiplier (GRM) by area for income properties on Montreal's North Shore.
Key figure — 2026
In 2026, the capitalization rate (cap rate / TGA) for an income property sits around 4.5% to 5.5% on Montreal's North Shore (4% to 5% on the Island of Montreal). The Gross Rent Multiplier (GRM) is approximately 12 to 14× annual gross income. The higher the cap rate, the better the yield per dollar invested.
Cap Rate · GRM · NOI · Income Approach · North Shore 2026
Cap Rate, GRM, NOI: the three yield metrics
Three complementary indicators to evaluate and compare income properties in Quebec.
The capitalization rate measures yield on net operating income (after expenses, before debt service). It is the reference indicator for value under the income approach: Value = NOI ÷ Cap Rate. A higher cap rate means more yield per dollar invested.
The Gross Rent Multiplier divides the price by gross income (before expenses). Faster to calculate but less precise than cap rate, as it ignores expense structure. On the North Shore in 2026, a typical GRM is 12× to 14× annual gross income. A lower GRM favours the buyer.
Net Operating Income is gross annual revenue minus operating expenses (taxes, insurance, management, maintenance), before debt service. It is the numerator in the cap rate formula and the core figure in any income-approach valuation. Use our NOI calculator to compute it.
Average Cap Rate and GRM by Area — Quebec 2026
Representative ranges for well-maintained income properties with stable income. These figures reflect observed transactions; individual cases vary.
| Area | Average cap rate | Average GRM | Context |
|---|---|---|---|
| Island of Montreal | 4 – 5% | 14 – 17× | Most liquid market, high prices, compressed yields |
| North Shore of Montreal | 4.5 – 5.5% | 12 – 14× | Best yield/price balance in metropolitan Quebec |
| Laval | 4.2 – 5% | 13 – 16× | Between Montreal and North Shore; longer timelines (~52 days) |
| South Shore | 4.5 – 5.5% | 12 – 15× | Comparable to North Shore; active market (~34 days) |
| Laurentians / Saint-Jérôme | 5 – 6.5% | 10 – 13× | Higher yields, +14%/yr growth, lower liquidity |
Indicative ranges based on observed transactions and APCIQ data (April 2026 report). Cap rates vary by property condition, rent quality, specific location, and market conditions. This data does not constitute an official property appraisal.
The cap rate is the central tool of the income approach: Value = NOI ÷ Cap Rate. A property with $45,000 NOI in a 5% cap rate market is worth $900,000. The same property in a 4.5% cap rate market is worth $1,000,000. This is why the same level of net income can produce very different values across markets, and why improving net income directly increases value without depending on broader market appreciation.
Cap rate in action: a $1,000,000 property
A concrete example illustrating how the cap rate determines value under the income approach.
GRM = $1,000,000 ÷ $80,000 = 12.5×. Conversely: if the market cap rate is 5% and your NOI is $50,000, the income-approach value is $50,000 ÷ 0.05 = $1,000,000.
How to use the cap rate to evaluate a purchase offer
When analyzing a property, start by calculating the NOI — actual gross income minus actual expenses (not optimistic estimates). Then apply the market cap rate for the sector to get an indicative value. If the asking price is consistent with that value, the offer is defensible; if the price implies a 3.5% cap rate in a 5% market, the seller is overvaluing the property.
For a seller, understanding your market's cap rate allows you to calibrate expectations: a well-rented property in a 5% cap rate market is structurally worth more than one with below-market rents, even if both are physically comparable 4-plexes. Bringing rents to market before selling is often the most powerful lever for maximizing sale proceeds.
Read our complete guide to cap rate and GRM, use the GRM calculator to compare properties side by side, or estimate your NOI with the NOI calculator. For an offer based on your property's actual income, use the Plex Assessment tool.
Cap rate and income property yield: your answers
In 2026, a cap rate of 4.5% to 5.5% is considered representative for a well-maintained income property on Montreal's North Shore. On the Island of Montreal, cap rates are more compressed, often between 4% and 5%. In the Laurentians (Saint-Jérôme area), cap rates can reach 5% to 6.5% or more depending on location. A higher cap rate indicates better immediate yield per dollar invested, but may also reflect a market perceived as less liquid or riskier.
The cap rate is: Cap Rate = Net Operating Income (NOI) ÷ Purchase Price. NOI is annual gross income minus operating expenses (taxes, insurance, management fees, maintenance), before debt service. Example: a property purchased for $1,000,000 generating $50,000 NOI has a 5% cap rate. Conversely, Value = NOI ÷ Cap Rate. Use our cap rate calculator to automate this calculation.
The cap rate (TGA in French) is calculated on NET operating income (after expenses, before debt). The Gross Rent Multiplier (GRM / MRB in French) is calculated on GROSS annual income: GRM = Price ÷ Annual Gross Income. Cap rate is a more precise yield indicator because it accounts for expenses; GRM is faster to calculate but masks differences in expense structures between properties.
Generally yes: a higher cap rate means more net income per dollar invested. But an atypically high cap rate can also signal inflated rents, underestimated expenses, significant deferred maintenance, or a less liquid sector. Always analyze the cap rate alongside gross income details, actual expenses, and the property's physical condition. Our deal analyzer helps you verify consistency.
Yes, that is the essence of the income approach: Value = Net Operating Income (NOI) ÷ Cap Rate. If a property generates $50,000 NOI and the market cap rate is 5%, its income-approach value is $1,000,000. This is why improving income (bringing rents to market, reducing vacancy) or reducing expenses directly increases property value, regardless of the area's median price. Estimate your value with our Plex Assessment tool.
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