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Canada’s housing affordability crisis is spreading beyond its two most expensive cities,according to a new index report from the Canada Mortgage and Housing Corporation (CMHC).
Money Canada reports that CMHC’s latest Housing Affordability Composite Index shows affordability pressures have spread to cities such as Ottawa, Montreal and Halifax, even as national conditions show modest signs of improvement.
The findings come as construction momentum slows and parts of the condo market remain under strain, making a quick turnaround in affordability increasingly unlikely.
According to CMHC, national homeownership affordability peaked in 2001 before eroding in three waves: 2001 to 2007, 2015 to 2020, and 2020 to 2023.
The first two declinews were largely driven by the Toronto and Vancouver markets. But after 2020, deterioration accelerated and spread to Ottawa, Montreal and Halifax – a shift CMHC has previously linked to pandemic-era remote work and increased labour mobility.
Since 2023, homeownership affordability has improved modestly in Ottawa, Toronto, Vancouver and Halifax, and stabilized in Montreal, Calgary and Edmonton. Still, CMHC cautions that conditions remain stretched relative to long-term averages.
For buyers, that means cooling prices and stabilizing rates have provided some relief, but affordability has not seen a reset to pre-pandemic norms.
In terms of rental affordability, CMHC’s latest index suggests that rental market erosion was more recent and less severe, but geographically broader, relative to home ownership. Sharp inflation in 2022 and 2023, combined with strong immigration levels, compressed renters’ budgets nationwide.
Because renters typically have less discretionary income and limited borrowing flexibility, rising costs can significantly reduce their ability to absorb rent increases.
The report also demonstrates persistent regional divides. Rental markets in Toronto and Vancouver, for example, have remained below historical affordability averages since 2006, while Montreal and Edmonton remained comparatively more affordable. Ottawa, Halifax and Calgary have gradually become less affordable over time.
