Housing Affordability

Interest rate cuts, easing home prices and income gains contributed to lower RBC's aggregate affordability measure in Q1.

Last year’s monetary policy pivot was a turning point for affordability in this country

The deep housing market slump got the ball rolling last year with a modest depreciation of property values tamping down homeownership costs.

Mortgage payments, property taxes and utilities fell as a share of median household income in Canada to 59.5% from 61% in Q1.

Slight drops in interest rates and home prices lowered the costs of owning a home in Canada in the first quarter

High interest rates propelled ownership costs to new summit in the fourth quarter of 2023: A household earning a median income needed to spend a staggering 63.5% of it to cover the costs of owning an average home at market price.

Mortgage rate increases and modest appreciation in home prices drove up RBC’s aggregate affordability measure for Canada by 2.8 percentage points to 62.5%. (A rise in the measure represents a loss of affordability.) This reversed a modest improvement in the second quarter.

The burden of home ownership costs got slightly lighter in the second quarter in Canada: RBC’s aggregate affordability measure for Canada fell for the second-straight time by 0.3 percentage points to 59.5%. Growing household income entirely accounted for the small improvement as buyers faced still-higher mortgage payments. But that burden remains extremely heavy overall: RBC’s […]

RBC’s aggregate affordability measure for Canada fell for the first time in almost three years, edging 1.6 percentage points lower to 59.5%

Owning a home got even more expensive: Rising interest rates further inflated home ownership costs in the fourth quarter of 2022, despite a generalized dip in property values. RBC’s aggregate affordability measure for Canada rose for a nineth-straight quarter to 62.8%, its worst-ever level. The situation deteriorated in all markets we track. Buyers in BC […]

The Bank of Canada’s battle against inflation has made it a lot harder to buy a home in this country.

Unsurprisingly, soaring ownership costs turned Canada’s housing market on its head.