New CMHC index showed the crisis easing slightly but biting harder across regional markets
Canada’s housing affordability crisis has long been framed as a Toronto‑and‑Vancouver problem. A new composite index from Canada Mortgage and Housing Corporation (CMHC) suggested that story is now badly out of date, with conditions near historic stress levels in Ottawa, Montréal and Halifax as well.
The Housing Affordability Composite Index (HACI), pulled together ownership and rental data, income trends and local supply‑demand dynamics across seven major centres.
CMHC said the measure was designed to replace the patchwork of single‑indicator gauges that tended to focus on ownership and overlook renters – an omission that left mortgage professionals without a full picture of how pressure shifted across markets.
“Affordability started recovering slightly since 2023, when it reached historical lows. For homeownership, we observed improved affordability, while for renters we saw stabilization over the last two years,” said Mathieu Laberge, chief economist and senior vice‑president, housing insights at CMHC.
“Even with these improvements, we cannot overlook how much housing affordability has eroded in recent years, especially in Ottawa, Montréal and Halifax, clearly demonstrating that Canada’s housing affordability crisis is no longer limited to Toronto and Vancouver.”
Homeownership pressure remained entrenched
Nationally, the index showed homeownership affordability hit its weakest point since the 1990s in the second quarter of 2022 before conditions improved modestly.
CMHC’s data traced three distinct waves of erosion beginning in 2001, with the latest – from 2020 to 2023 – no longer driven only by Toronto and Vancouver but by fast‑tightening conditions in Ottawa, Montréal and Halifax as remote‑enabled households moved into those markets.
Past CMHC modelling indicated that millions of additional homes would still be required by 2030–2035 to restore something closer to pre‑pandemic affordability, even if annual housing starts double from recent levels.
Rental markets told a different, but related, story
Rental affordability erosion has been more recent and less severe, but it has also been broad‑based. CMHC pointed to 2022–23 inflation and strong immigration as key drivers, with renters’ thinner discretionary income leaving less room to absorb higher shelter and non‑housing costs.
CMHC’s 2025 Rental Market Report found vacancy in purpose‑built rentals rose to 3.1%, up from 2.2% a year earlier. The agency said record high rental completions, along with weaker demand from slower population and economic growth, were the main reasons rents softened.
While higher‑end rentals in Toronto and Vancouver started to see softer conditions as unsold condos were pushed into the secondary rental market, CMHC said the most affordable units remain extremely tight, with little new stock and no direct substitutes.
That segment, the agency warned, is unlikely to see the same relief as luxury or newer purpose‑built rental inventory without sustained additions to low‑cost supply.
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