It hasn’t been this inexpensive to personal a house in Canada in three years, based on RBC Economics.
Its newest nationwide affordability measure dropped to 55.1% within the first quarter of 2025, down from 60.7% a 12 months in the past. The advance was pushed by rate of interest cuts, small declines in residence costs, and regular family earnings development.
“Typically enhancing traits are more likely to be sustained,” mentioned Robert Hogue, assistant chief economist at RBC. “We see earlier rate of interest cuts persevering with to favourably impression affordability with worth declines in some markets additional aiding the method.”
However whereas situations are enhancing, affordability stays removed from pre-pandemic ranges. “Regular enhancements prior to now 5 quarters have reversed solely roughly a 3rd of the lack of affordability nationwide,” Hogue mentioned. “Shopping for situations stay extraordinarily difficult in lots of main markets.”
He added that condominium patrons have seen the largest enhancements. “In some components of the nation—together with Edmonton, Saskatoon, Regina, Winnipeg and even Toronto—the condominium affordability measure is now successfully again to the place it was earlier than the pandemic,” he famous.
Vancouver, Toronto nonetheless the least inexpensive markets
Even with enhancements, proudly owning a typical residence in Vancouver nonetheless requires 92.7% of a median family’s earnings. Toronto stands at 68.3%, adopted by Montreal at 49.5%.
Calgary (42.3%), Ottawa (44.3%) and Edmonton (33.0%) stay among the many extra inexpensive giant markets.
“Worth drops additionally quickened the development in condominium affordability in Vancouver and Victoria—Canada’s two different priciest markets—although each nonetheless have much more misplaced floor to recuperate,” Hogue mentioned.
RBC expects additional aid forward
“We expect rate of interest cuts, additional worth drops in some markets and sustained earnings beneficial properties are set to reverse roughly half the rise in RBC’s composite affordability measure for Canada in the course of the pandemic by 12 months finish,” Hogue added.
However the financial institution cautions that “any additional progress will get trickier as soon as rates of interest stabilize,” as future enchancment will rely completely on residence costs and family earnings.
“Affordability will stay an enormous challenge in lots of components of the nation—and a significant impediment hindering restoration,” Hogue concluded.
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Final modified: July 3, 2025
