Housing Affordability

Understand housing affordability in Canadian real estate — how it's measured, why it matters, and what impacts access to affordable housing.

Housing Affordability

May 22, 2025


What is Housing Affordability?

Housing affordability refers to the relationship between household income and the cost of purchasing or renting a home in a given market.

Why Housing Affordability Matters in Real Estate

In Canadian real estate, housing affordability is a critical measure of how accessible housing is for different segments of the population. It is influenced by:
  • Home prices and rental rates
  • Interest rates and mortgage terms
  • Household income and employment stability
  • Government policies and incentives


Affordability is often assessed using metrics like the price-to-income ratio or shelter cost-to-income ratio. When housing costs exceed 30% of gross household income, the situation is generally considered unaffordable.


Understanding housing affordability is essential for buyers, policymakers, and developers seeking to address housing access and plan sustainable communities.

Example of Housing Affordability in Action

In a major city, the average household spends over 45% of its income on housing, indicating a significant affordability challenge.

Key Takeaways

  • Measures how income relates to housing costs.
  • Affects buyer access and policy decisions.
  • Exceeds 30% = generally unaffordable.
  • Influenced by prices, rates, and income.
  • Key issue in urban planning and supply policy.

Related Terms

  • Debt Service Ratios
  • Government Incentive
  • Mortgage Qualification
  • Interest Rate
  • Down Payment

Additional Terms

Budgeting

Budgeting in real estate refers to the process of forecasting and managing income and expenses associated with owning, operating, or developing a property.. more

Tenant Improvements

Tenant improvements refer to custom modifications or build-outs made to a leased space to suit the tenant’s operational needs, often negotiated as. more

Highest and Best Use

Highest and best use refers to the reasonably probable use of a property that results in the highest value, provided it is legally permissible,. more

Gross Lease

A gross lease is a commercial lease where the tenant pays a fixed rent, and the landlord covers most or all operating expenses such as property. more

Brownfield

A brownfield is a property that was previously used for industrial or commercial purposes and is now vacant or underused, often requiring. more

Record of Site Condition (RSC)

A Record of Site Condition (RSC) is a formal document filed with a provincial environmental authority certifying that a property meets required. more

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