Housing Affordability in Canada: How It's Measured and Why Homes Cost So Much

Owning a home in Canada has become more affordable since the end of 2023, though the improvement is slowing. In RBC’s latest reading, for Q2 2026, the costs of owning a typical home took 52.8% of a median household’s income before tax, RBC’s smallest improvement in almost a year. That is down from a record 63.5% at the end of 2023, and still well above the 30% that CMHC treats as affordable for housing costs.

How housing affordability is measured

CMHC’s standard. CMHC defines affordable housing by what it costs against income:

• Housing costs are less than 30% of the household's income.
• The income is the whole household's income before tax, not one person's take-home pay.
• For renters, housing costs are the rent plus electricity, heat, water and other municipal services the household pays for.
• For owners, housing costs are mortgage payments, property taxes and condominium fees, plus electricity, heat, water and other municipal services.

RBC’s affordability measure. RBC Economics estimates the share of a median household’s income that the ownership costs of a typical home would take: mortgage payments, property taxes and utilities, at current prices and mortgage rates. It comes out quarterly, for Canada and for the larger markets, so it shows what buying now would cost, which is why this page uses it.

The price-to-income ratio. The price of a home divided by a household’s income. Because it is built from price and income alone, it leaves out interest rates: it can stay high when falling rates make payments easier, and the reverse.

How affordability has changed

RBC Economics housing affordability reports: share of median household income needed to own a typical home. Lower means more affordable.

RBC says lower interest rates, flat prices and rising incomes brought its measure down from the end-2023 record, with lower rates doing most of the work at first. In Q2 2026, rising household income accounted for all of the national gain, as prices and rates held fairly steady. RBC expects upward pressure on long-term rates, and possible Bank of Canada rate increases next year, could push ownership costs up again.

Home prices against incomes

The ratio here divides CREA’s national annual average home price by the median before-tax income of economic families and persons not in an economic family (people not living with relatives) from Statistics Canada’s Canadian Income Survey (table 11-10-0190-01), with income converted to each year’s dollars.

CREA annual average sale prices; Statistics Canada table 11-10-0190-01 (median total income, economic families and persons not in an economic family), converted from 2024 dollars with the annual Consumer Price Index; ratios computed from those figures.

The ratio moved from 7.8 in 2016 to 8.0 in 2024. In 2020 and 2021 CREA’s annual average price changed by 13.1% and 21.3%. A national average is pulled up by sales in two of Canada’s most expensive markets, Greater Vancouver and the Greater Toronto Area, so the ratio is best read for its direction. Current prices are on average house prices in Canada.

Affordability by city

RBC Economics, housing affordability report, September 28, 2026: share of median household income needed for mortgage payments, property taxes and utilities, all home types. “Not stated”: the report gave no long-run average for that market.

Vancouver was the least affordable of the 14 markets, at 83.9%, and Regina the most affordable, at 27.9%. In Calgary the measure was close to its long-run average.

Why homes got less affordable: the housing crisis

Not enough homes. CMHC says Canada still faces a long-term housing supply gap, and that unless construction increases, the gains in affordability since 2023 will be hard to keep. New supply in most large cities is mainly rental, and starts of homes for owners have weakened considerably in recent years.

Population growth. CMHC links demand to population: slower population growth has brought some improvement in affordability, while in Halifax stronger population growth pushed housing demand past new supply.

Interest rates. Mortgage rates set what a home costs each month. RBC’s measure hit its record at the end of 2023, and lower rates accounted for more than four-fifths of its first year of decline.

Investors

Bank of Canada staff found that investors, defined as buyers who own more than one mortgaged property, made up 19% of mortgaged home purchases from 2014 to mid-2021. Statistics Canada’s property data show how much of the housing stock investors own differs by province: in 2022, 29.5% of Nova Scotia’s residential housing assets were investment properties, the highest of the provinces studied.

Supply: housing starts against the shortage

CMHC estimates Canada needs 417,000 to 469,000 housing starts a year to bring affordability back to pre-pandemic levels by 2036, a supply gap broadly unchanged from its 2025 estimate. The six-month trend in starts was 250,411 in September 2026, about 60% of the low end of that range. Edmonton is the only large market CMHC finds without a gap.

Housing starts, September 2026

CMHC, Housing starts and construction data for September 2026 (released October 16, 2026; the next release is November 17, 2026).

The trend is a six-month moving average of the seasonally adjusted annual rate (SAAR); CMHC publishes it because the monthly SAAR can swing widely with multi-unit starts.

CMHC, September 2026. Provinces and cities are centres of 10,000 people or more. The trend columns are annual rates; the year-to-date columns are actual units.

In Toronto the trend was flat in September 2026, as single-detached and multi-unit starts offset each other.

Who owns homes

The share of Canadian households who own their home fell to 66.5% in 2021, from a peak of 69.0% in 2011, as renter households grew more than twice as fast as owner households. The drop was largest among young adults:

Statistics Canada, 2021 Census of Population: homeownership rate by age group.

At the same age, 25 to 39, millennials were less likely to own than earlier generations: 49.9% in 2021, against 56.2% for Gen-Xers and 55.9% for baby boomers, after setting aside those living with their parents. Twice as many millennials of that age lived with their parents as boomers had (16.3% against 8.2%), and fewer were married with children, the household type most likely to own. Family property matters too: in 2021, 17.4% of adult children born in the 1990s whose parents owned a home owned one themselves, against 8.1% of those whose parents did not.

What it means for buyers

• Rent or buy: compare the two in your market.
• Mortgage affordability calculator and income needed to afford a home: what a lender would approve.
• First-time home buyers: programs, credits and rebates.

Government programs: First Home Savings Account · Home Buyers’ Plan · longer amortization for first-time buyers · Foreign buyer ban

Related analysis: household debt in Canada · mortgage debt statistics · net worth by age · average rent