Homeownership in Canada is now the most affordable it has been since 2022, according to a new report from Robert Hogue, assistant chief economist at RBC.
The bank’s aggregate affordability measure fell to 55.1 per cent in the first quarter of 2025, down from 60.7 per cent a year ago.
Lower interest rates, slight price reductions, and steady household income growth contributed to the improvement.
“Prices are still a long way from more attainable pre-pandemic levels,” Hogue said. He said the gains over the past five quarters have only reversed about one-third of the affordability lost during the pandemic.
Most major markets saw ownership costs decline, with Vancouver and Toronto posting the largest improvements. Despite that, they remain the least affordable housing markets in the country. In contrast, affordability worsened in Quebec City, Montreal, and Victoria.
Condos lead affordability gains
The improvement was strongest in the condo market. Buyers in cities such as Edmonton, Saskatoon, Regina, Winnipeg, and Toronto have seen condo affordability return to near pre-pandemic levels. These markets required little resetting as condo affordability held up better during the pandemic.
Toronto’s condo affordability measure is particularly noteworthy, said Hogue. After a sharp deterioration from 2021 to 2023, recent price drops and lower borrowing costs have brought it close to pre-pandemic levels. Vancouver and Victoria also showed progress in condo affordability, but still have a long way to go.
Single-detached homes remain less affordable across all markets, especially in Vancouver and Victoria, where costs remain substantially higher than before the pandemic.
Outlook for the remainder of 2025
Hogue expects that interest rate cuts, modest price declines, and continued income gains could reverse about half of the pandemic-era affordability deterioration by the end of this year.
However, once rates stabilize, further progress will rely entirely on income growth and home price trends. “Any further progress gets trickier,” Hogue said.
