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

Eviction

Eviction is the legal process by which a landlord removes a tenant from a rental property for violating lease terms or provincial tenancy laws.. more

Capital Cost Allowance

Capital Cost Allowance (CCA) is the tax deduction in Canada that allows property owners to depreciate the cost of a depreciable asset—such as a. more

Second Mortgage

A second mortgage is a loan secured against a property that already has a first (primary) mortgage, allowing the homeowner to borrow additional funds. more

Ownership Rights

Ownership rights refer to the legal entitlements a property owner holds, including the rights to use, sell, lease, or modify their real estate asset.. more

Legal Title

Legal title is the formal ownership of property recognized by law, granting the holder the right to transfer, sell, or mortgage the asset.. more

Broker Disclosure

Broker disclosure is the legal obligation of a real estate or mortgage broker to fully inform clients of key details about fees, relationships, and. more

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