Home prices are now exceeding $1 million in major cities
The gap between household income and housing costs continues to grow in Canada, making homeownership increasingly difficult in some regions.
According to a recent analysis by RATESDOTCA, home prices in cities such as Vancouver and Toronto far exceed what the average household can afford, while Calgary and Edmonton offer more accessible options.
In Vancouver, an average home costs $1,171,500, but the median family income is only $133,947—leaving an income shortfall of $121,053.
Similarly, in Toronto, where the average home is priced at $1,061,900, a household would need to earn $232,000 to afford it, yet the median income is $136,535—$95,465 less than required.
In contrast, cities like Edmonton and Calgary show income surpluses. The median household income in Calgary is $147,643, surpassing the required $129,000 by $18,643. Edmonton offers an even larger advantage, with an average home price of $397,400 requiring an income of $91,000—$50,604 below what the median household earns.
The $1 million home price challenge
Vancouver, Toronto, and Kelowna have all seen average home prices exceed $1 million, making it harder for potential buyers to enter the market.
Kelowna, which has historically been more affordable, now has an average home price of $1,076,544, requiring an income of $234,000 - $113,858 more than the city’s median income.
RATESDOTCA reports that while high interest rates have reduced housing demand, mortgage costs remain a significant burden for buyers.
Financial expert Leon Turkin notes that mortgage payments have become more expensive, even as demand slows.
For homes priced at $1.5 million or less, insured mortgage rates allow buyers to make a minimum down payment.
Affordability across Canadian cities
Nationally, the average home price stands at $676,640, requiring an annual income of $150,500. With a median income of $124,672, the typical Canadian household falls short by $25,828.
Other cities have varying affordability gaps. In Halifax, the shortfall is $11,123, while in Montreal the required income of $122,500 is slightly below the median household income of $122,946, making it one of the few major cities where incomes align with home prices.
Condo market and alternative buying strategies
Condos offer a more affordable alternative to detached homes, but affordability remains an issue in high-cost cities. In Vancouver, the average condo costs $768,200, requiring an income of $168,000—$48,053 more than what the average household earns. Toronto condo buyers face a gap of $21,465.
On the other hand, RATESDOTCA data shows that Edmonton’s median income surpasses the amount needed to buy a condo by $91,904, while Calgary residents have a $63,143 surplus.
To offset high costs, some buyers are turning to co-ownership with family or friends or seeking properties with rental income potential.
Realtor and mortgage agent Kevin Wong said that more people are getting creative with their housing choices.
Migration trends and housing market shifts
As home prices rise, many Canadians are relocating to more affordable regions. Between 2021 and 2022, nearly 100,000 Toronto residents moved to other areas, while Montreal lost 35,000 and Vancouver saw 14,000 leave. Alberta, particularly Calgary, has seen an increase in demand due to its lower housing costs.
According to RATESDOTCA, ongoing construction delays, high material costs, and inflation continue to impact housing affordability.
Turkin said that rising prices for materials such as lumber and steel have made it more expensive for developers to build new homes.
Do rising costs mean fewer people will be able to buy homes, or will alternative solutions emerge? Share your thoughts in the comments.
