Montreal’s housing market continued to outperform that of Vancouver and Toronto due to the region’s robust economy, low unemployment rate and the relative value of homes, according to a Royal LePage report released Tuesday.

The aggregate median home price (including all residential property types) in the Greater Montreal Area increased 5.4% year-over-year in the third quarter, to C$396,909 (US$306,870), the highest price appreciation rate of the three largest Canadian metropolitan areas.

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In September, the unemployment rate in Quebec, where Montreal is located, fell slightly to 5.3%, well below the national average of 5.9%, according to government data cited by Royal LePage.

"Quebec’s recent economic performance has ranked among the most impressive in the country," said Phil Soper, the brokerage’s president and chief executive. "Montreal remains much more affordable than other major markets."

By comparison, the aggregate home price in the Greater Toronto Area depreciated 0.4% to to C$836,402, while the Greater Vancouver Area rose 3.5% to C$1.27 million.

Overall, the Royal LePage National House Price Composite, covering 63 of the nation’s largest real estate markets, increased 2.2% annually to C$625,499 in the third quarter.

Canada Residential Prices in Q3/2018 Market Median Price Y-O-Y change Quarterly Change 63-city composit C$625,499 +2.2% +1.4% Greater Montreal Area C$396,909 +5.4% +0.9% Greater Toronto Area C$836,402 -0.4% +1.3% Greater Vancouver Area C$1,270,675 +3.9% 0.0% Source: Royal LePage

In terms of property type, condominiums continued to experience the highest rate of price increase nationwide, rising 6.7% year-over-year to C$441,240. The median price of a bungalow (one-story home) edged up 1.5% to C$519,886, while two-story houses saw a 1.4% increase to C$736,337, according to the report.

Additionally, Royal LePage predicts that the national home price will rise at a moderate pace of 1.5% in the fourth quarter of 2018.

"Positive economic fundamentals, supported by a new agreement on trade, should bolster consumer confidence across Canada and stoke demand in the nation’s real estate market," Mr. Soper said.

Canada, the U.S. and Mexico have reached a new agreement on regional trade, known as the USMCA, which is expected to be signed into law before year’s end.

"The new USMCA agreement has removed a widespread veil of uncertainty that was acting as a drag on large purchase decisions," including home buying, Mr. Soper said.