Housing Affordability Shows Notable Gains Across Canadian Markets
A recent analysis from RBC Economics indicates a positive shift in housing affordability across Canada, with the most significant improvements occurring in the nation's largest and previously least affordable markets. The report, published at the end of March 2026, examines ownership costs relative to household income in major urban centers, revealing a quarterly enhancement in accessibility for homebuyers.
Quarterly Improvements and Market Trends
From January to March 2026, more than 57 percent of Canadian housing markets experienced better affordability compared to the final quarter of 2025. This marks a notable increase from the previous period, where less than half of markets saw home ownership become more accessible. However, this first-quarter measure remains below the peak observed in the third quarter of 2025, when over 90 percent of markets recorded affordability gains.
The national affordability metric, which assesses ownership costs as a percentage of household income, dropped to 52 percent in the last quarter of 2025. RBC forecasts further improvement to approximately 51 percent in 2026, followed by a slight decrease by year-end. This represents a substantial recovery from 2023, when housing affordability peaked at a challenging 63 percent of household income.
Regional Disparities in Ownership Costs
Despite overall progress, significant regional variations persist. Canada's most expensive markets continue to exceed the national average, with ownership costs in Toronto nearing 63 percent of household income at the end of 2025. In Vancouver, this figure soared above 88 percent, highlighting ongoing affordability challenges in these metropolitan areas.
In contrast, Calgary demonstrated relatively favorable conditions, with ownership costs accounting for about 42 percent of household income. The city experienced a modest increase in these costs but remains within its historical average. Edmonton emerged as the most affordable major city, where ownership costs represented approximately 33 percent of income, slightly above its long-term average.
Driving Factors and Economic Context
The improvement in housing affordability is primarily attributed to declining prices in slumping markets, particularly in large urban centers that have seen sustained price reductions over recent years. This trend has made home ownership more attainable for many households, though disparities between regions underscore the complex dynamics of Canada's real estate landscape.
The RBC Economics report underscores a cautious optimism for prospective homebuyers, while emphasizing the need for continued monitoring of market fluctuations and economic indicators. As affordability metrics evolve, these insights provide valuable context for policymakers, investors, and consumers navigating the housing sector.
