Housing affordability is a hot topic in Canada — but what does it actually mean?
At its core, housing affordability measures how much of your income goes toward owning a home. A common benchmark is the percentage of income needed to cover mortgage payments, property taxes, and utilities.
For example, RBC Economics tracks affordability by calculating how much of a median pre-tax household income is required to afford a typical home. In cities like Toronto and Vancouver, that number can be over 60%, making homeownership extremely challenging for many families.
To give you a clearer picture, here’s a snapshot of affordability in some Toronto neighbourhoods:
High Affordability Ratios: Neighbourhoods like Rosedale and Forest Hill exhibit higher affordability ratios, indicating that a significant portion of household income would be required to purchase a median-priced home.
Mid-Range Ratios: Areas such as Trinity Bellwoods and Leslieville have moderate affordability ratios, suggesting a more balanced relationship between income and home prices.
Lower Ratios: Oakville shows lower affordability ratios, which may indicate that home prices are more accessible relative to household incomes in these areas.
Affordability ratio here is a simplified price-to-income ratio to illustrate the scale of costs relative to incomes.
Generally, a home is considered affordable if it costs less than 4 to 5 times your household income. As you can see, many Toronto neighbourhoods are far above that.
Why It Matters
When the affordability ratio gets too high, it means buyers may have to stretch their budgets, delay homeownership, or rely on financial help.
Understanding housing affordability can help you make informed decisions about where — and how — to buy. If you’re feeling stuck, you're not alone, and there are strategies to navigate this market wisely.
Want help breaking down what’s affordable for you? Let’s talk.
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