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

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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