What is the housing affordability index in Canada?

Housing affordability indexes measure how much of a household's income is needed to cover the costs of owning an average home. The RBC Housing Affordability Index shows that a Canadian household now needs roughly 60% of pre-tax income to cover mortgage payments, property taxes, and utilities on an average home — compared to a historical norm of 35–40%. Values above 50% are considered unaffordable.

What is the most affordable city to buy a home in Canada?

Among major cities, Edmonton and Saskatoon are consistently the most affordable, with price-to-income ratios around 4–5x and mortgage carrying costs of 30–35% of median household income. Quebec City, Winnipeg, and Regina also offer relative affordability compared to Vancouver, Toronto, and other major metro areas.

How is housing affordability measured?

Housing affordability is typically measured by: (1) Price-to-income ratio — how many years of income to buy the average home; (2) Mortgage carrying cost as a % of income — monthly mortgage payment, taxes, and utilities divided by household income; (3) Income required to qualify — the minimum household income needed to pass the stress test for a median-priced home. These metrics are tracked by RBC, National Bank, and CMHC.

Will housing become more affordable in Canada?

Affordability is slowly improving as interest rates decline from their 2023 peak and incomes gradually rise. However, for a meaningful improvement in affordability, either home prices need to stagnate for several years (allowing incomes to catch up) or a significant new supply of housing needs to reach the market. Most forecasters expect affordability to improve modestly but remain well above historical norms for the foreseeable future.

Housing Affordability Index Canada: Tracking the Cost of Homeownership Over Time

Housing affordability is the defining issue of Canadian real estate. What took 3–4 years of income to buy in the early 2000s now takes 7–8 years — and in Vancouver and Toronto, it’s 10–14 years. Here’s a comprehensive look at how we got here, where we stand, and what the data says about where we’re headed.

How housing affordability is measured

Key metrics

Metric	What It Measures	Source	“Affordable” Threshold
Price-to-income ratio	Years of gross income to buy average home	CREA/StatsCan	<5x
Mortgage carrying cost (% of income)	Monthly mortgage + taxes + utilities ÷ income	RBC	<32% (GDS)
Income required to qualify	Minimum income to pass stress test	National Bank	Varies by city
Ownership cost vs rent	Whether buying or renting is cheaper	Various	Rent-to-own ratio <1.0
Affordability index	Composite measure scored relative to history	RBC, National Bank	Below long-term average

The RBC Housing Affordability Index

The RBC Housing Affordability Index is Canada’s most widely cited affordability measure. It calculates the share of median pre-tax household income needed to cover ownership costs (mortgage at prevailing 5-year rate, property tax, and utilities) for the median-priced home.

RBC Index Level	Interpretation
30–35%	Affordable — most households can manage
35–45%	Moderately stretched
45–55%	Unaffordable — requires dual high incomes
55%+	Severely unaffordable — most households priced out
60%+	Crisis-level affordability

National affordability over time

RBC Affordability Index (national, all housing types)

Year	RBC Index (% of income)	5-Year Fixed Rate	Avg Home Price	Interpretation
2000	32%	7.4%	$163,000	Affordable
2005	35%	5.5%	$249,000	Moderately affordable
2008	42%	5.8%	$305,000	Stretched
2010	39%	4.6%	$339,000	Moderately stretched (low rates helped)
2015	42%	2.7%	$443,000	Stretched despite low rates
2019	48%	3.1%	$503,000	Unaffordable
2021 Q1	44%	2.0%	$688,000	Temporarily improved by ultra-low rates
2022 Q2	62%	5.3%	$713,000	Crisis — worst ever recorded
2023 Q4	55%	5.8%	$657,000	Severe — slightly better with price drop
2024 Q4	52%	4.8%	$670,000	Improving slowly
2025 Q4	49%	4.3%	$685,000	Continued improvement
2026 (est.)	47–48%	4.0%	$700,000	Still unaffordable but trending better

Source: RBC Economics. Index = ownership costs as % of median household income.

What the trend shows

Affordability has been in a long-term decline since the early 2000s. The brief improvement in 2020–2021 was an illusion — low rates made payments cheaper, but prices surged in response, and when rates normalized, affordability collapsed to the worst level ever recorded in 2022. The current slow improvement is driven by rate cuts and income growth, not price declines.

Affordability by city

Major city comparison (2025–2026 estimates)

City	Median Home Price	Median Household Income	Price-to-Income	Mortgage Carrying Cost (% of income)	Income Required to Qualify
Vancouver	$1,180,000	$85,000	13.9x	78%	$195,000
Toronto	$1,080,000	$90,000	12.0x	69%	$180,000
Hamilton	$780,000	$82,000	9.5x	56%	$133,000
Victoria	$820,000	$80,000	10.3x	60%	$140,000
Ottawa	$620,000	$95,000	6.5x	42%	$108,000
Montreal	$550,000	$72,000	7.6x	47%	$98,000
Calgary	$560,000	$95,000	5.9x	38%	$100,000
Halifax	$480,000	$72,000	6.7x	43%	$87,000
Winnipeg	$370,000	$75,000	4.9x	33%	$69,000
Edmonton	$400,000	$92,000	4.3x	30%	$74,000
Saskatoon	$370,000	$80,000	4.6x	31%	$69,000
Quebec City	$350,000	$70,000	5.0x	33%	$66,000

Assumptions: 20% down payment, 5-year fixed at 4.3%, 25-year amortization, stress test at 6.3%. Carrying cost includes mortgage, property tax (1%), and $300/month utilities.

City affordability tiers

Tier	Cities	Price-to-Income	Carrying Cost
Crisis	Vancouver, Toronto	12–14x	65–80%
Severely unaffordable	Victoria, Hamilton	9–11x	55–60%
Unaffordable	Ottawa, Montreal, Halifax	6.5–8x	42–48%
Stretched	Calgary	5–6x	35–40%
Affordable	Edmonton, Saskatoon, Winnipeg, Quebec City	4–5x	30–35%

What income do you need?

Income required to buy a median-priced home (by city)

City	Median Home Price	Down Payment (20%)	Mortgage Amount	Monthly Payment (4.3%, 25yr)	Stress Test Income Required
Vancouver	$1,180,000	$236,000	$944,000	$5,100	$195,000
Toronto	$1,080,000	$216,000	$864,000	$4,667	$180,000
Hamilton	$780,000	$156,000	$624,000	$3,371	$133,000
Ottawa	$620,000	$124,000	$496,000	$2,679	$108,000
Montreal	$550,000	$110,000	$440,000	$2,377	$98,000
Calgary	$560,000	$112,000	$448,000	$2,420	$100,000
Edmonton	$400,000	$80,000	$320,000	$1,729	$74,000
Winnipeg	$370,000	$74,000	$296,000	$1,599	$69,000

Most Canadian households earn $72,000–$95,000. In Vancouver and Toronto, you need roughly double the median income to buy the median home.

The income gap

City	Income Required	Median Income	Gap
Vancouver	$195,000	$85,000	$110,000 short
Toronto	$180,000	$90,000	$90,000 short
Hamilton	$133,000	$82,000	$51,000 short
Ottawa	$108,000	$95,000	$13,000 short
Montreal	$98,000	$72,000	$26,000 short
Calgary	$100,000	$95,000	$5,000 short
Edmonton	$74,000	$92,000	Affordable — $18,000 surplus
Winnipeg	$69,000	$75,000	Affordable — $6,000 surplus

Only Edmonton and Winnipeg allow a median-income household to comfortably qualify for a median-priced home. In Vancouver, you’d need to earn more than double the local median.

The first-time buyer perspective

First-time buyers face additional challenges beyond high prices:

First-time buyer affordability (2026 estimates)

Factor	20 Years Ago	Today	Change
Avg entry-level home (national)	$140,000	$500,000	+257%
Min down payment required	$7,000 (5%)	$25,000 (5%)	+257%
Years to save down payment (10% savings rate)	1.5 years	5+ years	+233%
Monthly mortgage payment	$900	$2,700	+200%
Qualifying income needed	$38,000	$95,000	+150%
Household income	$46,000	$92,000	+100%

The core problem: Incomes have doubled in 20 years. Home prices have tripled. The gap compounds over time.

Provincial affordability comparison

Province	Avg Home Price	Median Income	Price-to-Income	Affordability Ranking
British Columbia	$960,000	$82,000	11.7x	10th (worst)
Ontario	$850,000	$86,000	9.9x	9th
Nova Scotia	$400,000	$65,000	6.2x	8th
PEI	$380,000	$60,000	6.3x	7th
Quebec	$450,000	$68,000	6.6x	6th
New Brunswick	$310,000	$60,000	5.2x	5th
Manitoba	$340,000	$70,000	4.9x	4th
Newfoundland	$280,000	$63,000	4.4x	3rd
Alberta	$450,000	$90,000	5.0x	2nd
Saskatchewan	$330,000	$78,000	4.2x	1st (best)

What will improve affordability

Scenario analysis

Scenario	How It Helps	Magnitude	Likelihood
Interest rates fall to 3%	Lower carrying costs	Improves index by 5–8 points	Moderate
Prices drop 15%	Lower purchase price	Improves index by 8–10 points	Low-moderate
Incomes grow 5%/year for 5 years	Higher purchasing power	Improves index by 6–8 points	Moderate
30-year amortization available to all	Lower monthly payments	Improves index by 4–6 points	High (already expanding)
Massive supply increase	More homes → lower prices	Improves index by 5–15 points	Low (takes 5+ years)
All of the above combined		Could bring index back to 35–40%	Low

The math of a return to “normal”

For affordability to return to the long-term historical average (~38% RBC index), one of the following would need to happen:

Path	Required Change	Timeline
Prices decline	−30% from current levels	Requires severe recession
Incomes rise	+60% increase needed	Would take 10–12 years at 4%/year growth
Rates fall	Would need sub-2% rates with no price response	Unlikely — low rates cause prices to rise
Combined: flat prices + income growth + lower rates	5–7 years of stagnation + 3–4% income growth + rates at 3.5%	Most likely path, but slow

The bottom line

Housing affordability in Canada is at historically poor levels — carrying costs take roughly 48% of median income nationally
Vancouver and Toronto are in crisis — requiring double the local median income to buy a median home
The prairie provinces are still affordable — Edmonton, Saskatoon, and Winnipeg remain accessible to median-income households
Rate cuts are helping but won’t solve the problem alone — lower rates reduce payments but tend to push prices higher
A return to historical affordability norms will take years — even under optimistic scenarios
First-time buyers face a compounding gap — prices have grown 2.5x faster than incomes over 20 years