The Canadian housing market shows a stark contrast in affordability between regions. Southern Ontario and British Columbia exhibit significantly higher home prices relative to income, exceeding a threshold of 8 (price-to-disposable income ratio), indicating unaffordability. Meanwhile, other parts of Canada remain below this threshold.
Vancouver stands out as the least affordable city in Canada and even North America, with a price-to-income ratio of 14.4. This is attributed to a combination of factors, including a warmer climate attracting strong demand and restrictive zoning laws leading to limited supply.
In contrast, cities like Quebec City, Saskatoon, St. John's, Winnipeg, Edmonton, and Regina showcase ratios around 5 or lower, reflecting far better affordability for first-time homebuyers. These cities provide a more sustainable housing market.
The study highlights that factors such as population size and job availability aren't the primary drivers of unaffordability, as demonstrated by relatively affordable cities such as Montreal and Calgary. Condos, while offering an entry point in more expensive markets, may lack the space and are burdened by condo fees, making them less ideal for growing families.
Unlike repeat homebuyers and investors, first-time homebuyers rely primarily on their incomes to fund both the down payment and monthly mortgage payments. As such, one of the most relevant indicators of affordability for them is the home price-to-disposable income ratio.
In this analysis, we examine all major Canadian metropolitan areas with populations over 200,000, comparing their relative affordability using the ratio of the MLS® Home Price Index (HPI) to median household disposable income as of February, 2025.
For Kelowna and Sherbrooke, we used the average home price instead of the MLS® HPI, owing to real estate board boundary limitations. Additionally, because finalized income data for 2025 is not yet available, we extrapolated household disposable income from either 2020 or 2023 – depending on the metro area – using indicators such as provincial wage growth as a proxy.
The data reveal a stark divide in the Canadian housing market. On one side are most regions in Southern Ontario and British Columbia, where home prices significantly outpace incomes, pushing the ratio well above 8 – a threshold that signals unaffordability. On the other side lies the rest of the country, where this ratio remains below 8, indicating relatively better affordability.
This contrast is what we refer to as a tale of two markets. For example, in 2024, more affordable provinces saw home price growth, while Ontario and B.C. remained mostly stagnant.
What sets these two markets apart is a combination of factors, including warmer climates and restrictive zoning laws in parts of Ontario and B.C. Milder weather attracts stronger demand, particularly from newcomers, fuelling rapid population growth, while restrictive zoning keeps housing supply inelastic and slow to respond.
Interestingly, population size and even job availability are not the main drivers of unaffordability. Cities such as Montreal and Calgary remain relatively affordable despite their large populations and strong economies.
At the extreme end of the spectrum is Vancouver, with a staggering price-to-income ratio of 14.4, making it not only the least affordable city in Canada but also the most unaffordable large metropolitan area in North America.
In contrast, cities such as Quebec City, Saskatoon, St. John’s, Winnipeg, Edmonton and Regina have ratios around 5 or lower, reflecting far more sustainable housing markets for first-time buyers.
While condos remain an entry point for first-time buyers in the larger, unaffordable markets of Ontario and B.C., their limited space and condo fees make them less attractive for young families planning to grow.
Hanif Bayat, PhD, is the CEO and founder of WOWA.ca, a Canadian personal finance platform.
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