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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

Land Banking

Gentrification is the process by which a traditionally lower-income neighbourhood undergoes revitalization and attracts higher-income residents,. more

Land Assembly

Land assembly is the process of acquiring and consolidating multiple adjacent parcels of land under one ownership, typically for redevelopment or. more

Joint Venture

A joint venture in real estate is a partnership between two or more parties to develop, own, or operate a property or project, sharing risks, costs,. more

Infill Development

Infill development is the process of building new housing, commercial buildings, or amenities on vacant or underutilized land within existing urban areas.. more

Inclusionary Zoning

Inclusionary zoning is a municipal planning tool that requires or incentivizes developers to include a percentage of affordable housing units in new. more

Impact Fees

Impact fees are charges levied by municipalities on new developments to offset the cost of additional public infrastructure and services required by. more

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