Condo Buyers Gain Ground as Affordability Returns to Pre-Pandemic Levels

Condo affordability in Canada has improved considerably, with many markets returning to affordability levels not seen since before the pandemic. Nationally, the share of household income required to cover condo ownership costs has fallen to just over 35 per cent, bringing it close to 2019 levels. Lower condo prices, combined with rising household incomes, have made homeownership more accessible for buyers in this segment.

The strongest affordability improvements have been seen in cities such as Toronto and Victoria, where condo ownership has become more affordable than it was before the pandemic. However, the recovery has not been uniform across the country. In cities including Montreal, Quebec City, and Halifax, rapid population growth and limited housing supply have continued to keep condo prices elevated, slowing affordability gains.

Montreal has now become less affordable for condo buyers than Toronto for the first time in 16 years, while Halifax has narrowed the affordability gap significantly. Despite recent improvements, Halifax remains well above its 2019 affordability level, making it one of the markets where housing costs have increased the most since the pandemic.

Vancouver recorded the largest improvement in affordability during the first quarter of the year, although it remains Canada's least affordable housing market. Homeownership there still requires roughly 84 per cent of a typical household's pre-tax income. Toronto also posted stronger-than-average affordability gains for condos, thanks to price corrections and steady income growth. Detached homes, however, remain much less affordable, requiring more than 80 per cent of household income.

Looking ahead, further improvements in housing affordability are expected to be more challenging. Home prices have stabilized in many of Canada's major markets, and significant mortgage rate reductions appear unlikely in the near future. As a result, future affordability gains will depend largely on continued income growth, although a softer labour market could limit how much additional relief buyers receive.