Vancouver and Toronto post biggest gains while Montreal and Quebec City buck the trend
Canada's housing market is becoming more affordable for a growing share of buyers, with RBC Economics reporting that its national measure of homeownership costs has reached its best level in four years.
The bank's affordability index, which tracks the share of pretax household income needed to cover ownership costs, dropped 1.4 percentage points to 53% in the first quarter of 2026. A lower reading signals improving affordability.
Gains were broad-based across most major markets, with Vancouver and Toronto recording the steepest improvements even though both remain Canada's most expensive cities to own a home. Montreal, Quebec City and St. John's moved in the opposite direction, each seeing ownership costs climb further.
Condominiums have driven much of the national recovery. RBC's countrywide condo affordability measure now sits at 35.2%, within a percentage point of where it stood before the pandemic, and several individual markets have actually surpassed their late-2019 benchmarks.
Toronto condos are now more affordable than they were heading into the pandemic, with the measure falling to 36.1% from 38.5% in the fourth quarter of 2019. Victoria has seen a similar shift, easing to 31.8% from 32.2% over the same period.
Uneven recovery
But not every market has shared in the relief.
Strong population growth in earlier years combined with limited new supply pushed condo prices sharply higher in Montreal, Quebec City and Halifax, and those increases have largely held. Montreal's condo affordability reading has now overtaken Toronto's for the first time in 16 years, while Halifax has closed to within three percentage points of Toronto, its narrowest gap with the country's second-priciest market in more than ten years.
Subheadings break the report into a national overview, a tapering outlook, and city-by-city detail.
RBC economists noted that home prices appear to be leveling off in most major markets and they do not expect the Bank of Canada to deliver any additional rate cuts this year, meaning income growth will need to carry more of the weight behind any future affordability gains. Soft labour market conditions could limit how much relief that provides.
Even so, the report suggests affordability is unlikely to worsen significantly either, since stable prices and borrowing costs point to little change in mortgage expenses over the coming months. A meaningful pickup in wage growth tied to a tighter labour market is seen as more of a 2027 story, once the current economic soft patch fades.
Renters relief
Renters are also catching a break, the report found, as asking rents continue to decline across most cities, with Toronto and Vancouver again leading the way. Slower population growth and stretched affordability are weighing on demand in both rental and ownership markets in those two cities alike.
City by city, the picture varies considerably. Vancouver posted the largest quarterly drop in its affordability measure of any market tracked, falling four percentage points from the previous quarter and 9.3 points from a year earlier. Despite that progress, the index remains at 84.1%, still by far the worst in the country and only halfway back from the deterioration seen during the pandemic. Trade tensions and broader economic uncertainty continue to weigh on buyer demand there.
Victoria's affordability measure eased 2.1 percentage points in the quarter, helped by rising inventory and softer demand, though at 63.2% it remains one of the toughest markets in the country for buyers.
Calgary's affordability picture has largely normalized, with its measure of 41.5% now close to its long-run average of 39.8%. Resales there are running about 25% above pre-pandemic levels, supported by Alberta's stronger economy and continued population growth.
Edmonton has seen comparatively little movement, with its measure at 36.8% versus a long-term average of 32.9%, though resale activity remains roughly 40% above pre-pandemic norms.
Saskatoon and Regina continue to rank among the most affordable major markets, at 32.1% and 27.2% respectively, while Winnipeg remains close to its highest affordability burden since 1991 at 33%, with transactions down 8% over the first five months of the year.
Toronto's overall affordability measure fell 2.2 percentage points to 65.2%, driven largely by condos, where the local index of 35.2% has now edged above its pre-pandemic level. Detached homes tell a very different story, with ownership costs consuming more than 80% of a typical household's income before tax, keeping Toronto as Canada's second least affordable market overall.
Ottawa's affordability measure improved modestly to 43.2%, held back by a steadier detached-home market even as condo affordability nears pre-pandemic territory.
Montreal remains an outlier, with prices 5.5% higher than a year ago pushing its affordability measure to 52.6%, the worst level since 1990. Quebec City has deteriorated further still, reaching 39.5%, with RBC noting it is the only major market that has not improved since late 2023.
Smaller Atlantic markets showed mixed results. Saint John held steady at 31.4%, Halifax improved modestly to 41.6% even as it remains well above pre-pandemic levels, and St. John's, at 29.3%, continues to defy historically stretched affordability with resilient resale activity.
The report was authored by Robert Hogue, assistant chief economist at RBC, and economist Rachel Battaglia.
