Housing affordability improved once more throughout most main Canadian markets within the first quarter, however RBC Economics says the interval of significant reduction could also be nearing its restrict.
RBC’s nationwide affordability measure fell 1.4 share factors to 53% in Q1 2026, its finest degree in 4 years. The measure tracks the share of a median family’s pre-tax earnings wanted to cowl possession prices, so a decrease studying factors to enhancing affordability.
The good points had been led by Vancouver and Toronto, the place weaker costs have helped ease a few of the stress on consumers. However each markets stay the least reasonably priced within the nation, and RBC says the development thus far has solely partially reversed the sharp deterioration seen throughout the pandemic.
“Additional easing in affordability may get slimmer as worth declines taper off, and rates of interest have seemingly handed cyclical lows, limiting reductions in mortgage prices,” RBC stated in its newest housing affordability report.
RBC’s outlook factors to a market the place affordability has stopped worsening, however stays stretched. With little change anticipated in costs or rates of interest, additional reduction will seemingly rely extra on earnings progress than decrease mortgage prices, it famous.
Rental consumers see the most important reduction
Probably the most notable enchancment has been within the rental market, the place worth corrections have been sharper than for different housing sorts.
RBC’s nationwide rental affordability measure now sits at 35.2%, lower than one share level from its pre-pandemic degree. In some markets, rental affordability has already improved past the place it stood in late 2019.
In Toronto, sharply decrease rental costs have introduced values practically again to This fall 2019 ranges, serving to roll again the pandemic-era deterioration in affordability for that phase. However the general market stays deeply strained, with single-detached possession prices nonetheless taking over greater than 80% of a typical family’s pre-tax earnings.
The report additionally factors to a reshuffling in rental affordability throughout main markets. Montreal’s rental affordability index has moved above Toronto’s for the primary time in 16 years, whereas Halifax is now inside three share factors of Toronto. RBC stated tight provide and the sooner inhabitants growth pushed rental costs larger in Montreal, Quebec Metropolis and Halifax, the place affordability stays effectively above pre-pandemic norms.
Reduction stays uneven throughout areas
Vancouver posted the biggest affordability enchancment among the many markets RBC tracks, with its combination measure falling 4 share factors in Q1 and 9.3 factors from a yr earlier. Even so, at 84.1%, it stays Canada’s least reasonably priced market by a large margin.
Toronto’s combination measure fell 2.2 factors to 65.2%, helped by rental worth declines, whereas Ottawa noticed a extra modest enchancment, with its measure falling 1.4 factors to 43.2%.
Montreal moved in the wrong way, the place dwelling costs had been nonetheless up 5.5% from a yr earlier in Q1, pushing its affordability measure to 52.6%, the worst degree since 1990. Quebec Metropolis additionally remained an outlier, with affordability deteriorating as costs continued to rise and the market averted the correction seen in lots of different centres.
Circumstances stay much less strained within the Prairies, the place affordability measures are nearer to long-run norms. Calgary’s affordability measure stood at 41.5%, near its long-run common, whereas Edmonton was little modified at 36.8%. Regina remained probably the most reasonably priced market tracked by RBC, with its combination measure at 27.2%.
RBC stated additional affordability good points may very well be more durable to realize if charges and costs stay largely secure.
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Final modified: July 2, 2026
