New analysis shows typical homes out of reach even for median-earning families
The dream of owning a home in Canada has remained powerful for young households – but the numbers behind that aspiration has grown steadily worse.
A new Fraser Institute study found that in 2023, “typical homes on the market were unaffordable for families earning the local median income in every major Canadian city.”
The authors said “the dream of homeownership is alive, but not well,” with affordability eroding far beyond the usual flashpoints of Vancouver and Toronto.
Between 2014 and 2023, the study reported, a 20% down payment for a typical home rose from the equivalent of 14.1 months of after-tax income to 22 months – a 56% jump – while the share of income needed for a representative mortgage payment climbed from 29.9% to 56.6%.
Those figures were based on benchmark prices from the Canadian Real Estate Association and median after-tax family incomes from Statistics Canada, according to the technical paper.
In Fredericton, the country’s most affordable large market by this measure, a median-income family in 2023 still had to save 10.6 months of after-tax income for a 20% down payment, with mortgage payments eating 27.2% of income.
In Vancouver, the study said a typical down payment required the equivalent of 43.7 months of after-tax income, while the associated mortgage payment would consume more than the family’s entire after-tax income – “a financial impossibility unless the family could rely on support from family or friends.”
Renting offered little relief
Renters have also felt the squeeze. The Fraser Institute paper estimated that from 2014 to 2023, the cost of a median-priced rental climbed from 19.8% to 23.5% of median after-tax family income across major centres.
In Toronto and Vancouver, median rents required more than 30% of income, a threshold many policymakers used as a rule-of-thumb for stress.
Young buyers faced a widening gap
Particularly in the younger generations, incomes hadn’t kept up with property price gains, making it really hard to save for that downpayment and then be able to afford the monthly payment.
Housing worries rivalled cost-of-living and health concerns, with just over half of respondents anxious about keeping up with mortgage or rent payments and confidence especially low among Gen Z.
National Bank of Canada found mortgage payments on a median-priced home still consumed 56.6% of income in late 2024, even after modest improvements, with the bank warning that “affordability may continue to improve, but it is unlikely to return to pre-pandemic levels anytime soon.”
Fraser’s authors argued that “poor public policy” – from restrictive local land-use rules to lengthy approvals and a “historic surge in immigration that greatly outpaced new home construction” – has pushed prices and rents well ahead of incomes.
They concluded that reversing a decade of deterioration would require accelerated homebuilding, better-paced immigration and policies that raise wages while containing tax burdens, warning that such commitments were “changes governments routinely promise but rarely deliver.”
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