A total of three rate cuts passed down from the Bank of Canada since June have cumulatively lowered the cost of borrowing for Canadians by 75 basis points, from 5% to 4.25%, offering home buyers some much-needed relief in terms of affordability.
This is according to the latest affordability report compiled by Ratehub.ca, which crunches the minimum annual income required to buy an average home in some of Canada’s major cities. (Ratehub Inc. owns both Ratehub.ca and MoneySense.) The report is based on September 2024 and August 2024 real estate data reported by the Canadian Real Estate Association (CREA). It illustrates how changing mortgage rates, stress test rates and real estate prices are impacting the income needed to buy a home.Â
The September edition (updated monthly, so bookmark this page) shows the required income lowered in 11 of the 13 housing markets studied, as the average five-year fixed mortgage rate dropped to 5.04%, compared to 5.16% in August. As a result, the corresponding average mortgage stress test rate—which tacks on an additional 2% to a borrowers’ contract mortgage rate—fell to 7.04% from the previous 7.16%.
Let’s take a look at how that’s impacted home buyers across Canada.
The best places to buy real estate in Canada
Housing affordability across Canada’s major cities
Check out the chart below to see how affordability changed between August and September in Canada’s main housing markets, based on the income required to qualify for a mortgage.
September 2024: How much do you need to earn to buy a home in Canada?
| City | Average home price in August | Average home price in September | Change in home price | Income required in August | Income required in September | Change in income |
|---|---|---|---|---|---|---|
| Vancouver | $1,195,900 | $1,179,700 | -$16,200 | $224,000 | $219,000 | -$5,000 |
| Toronto | $1,082,200 | $1,068,700 | -$13,500 | $204,100 | $199,800 | -$4,300 |
| Hamilton | $840,300 | $831,500 | -$8,800 | $161,800 | $158,740 | -$3,060 |
| Victoria | $866,700 | $864,400 | -$2,300 | $166,420 | $164,450 | -$1,970 |
| Halifax | $543,700 | $538,100 | -$5,600 | $109,940 | $108,000 | -$1,940 |
| Calgary | $586,100 | $582,100 | -$4,000 | $117,360 | $115,600 | -$1,760 |
| Ottawa | $646,000 | $642,800 | -$3,200 | $127,830 | $126,100 | -$1,730 |
| Edmonton | $400,200 | $399,400 | -$800 | $84,850 | $83,990 | -$860 |
| Winnipeg | $361,800 | $362,500 | $700 | $78,140 | $77,600 | -$540 |
| Fredericton | $311,300 | $312,000 | $700 | $69,310 | $68,860 | -$450 |
| Regina | $319,700 | $320,700 | $1,000 | $70,780 | $70,360 | -$420 |
| Montreal | $535,700 | $543,400 | $7,700 | $108,550 | $108,900 | $350 |
| St. John’s | $354,600 | $364,100 | $9,500 | $76,880 | $77,880 | $1,000 |
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Canadian cities where affordability improved
Where in Canada is owning a home becoming more affordable?
Vancouver: A chilly start to the autumn market
Vancouver topped the list of cities with most-improved affordability, largely due to the fact that the average home price absorbed a $16,200 drop from August. Make no mistake,—this is still Canada’s most expensive housing market with an average property price tag of $1,179,700. But demand has been quite cool coming out of the summer months. According to the Greater Vancouver Realtors, sales fell 3.8% year-over-year in September, while the supply of new listings rose 12.8%, leading to an easy buyers’ market. As a result, Vancouver home buyers need to earn $5,000 less than they did last month to qualify for a mortgage on the average-priced home, at an income of $219,000.
Toronto: A month of flat sales
The city of Toronto came in second, as home prices continue to fall within Ontario’s largest city; the average property sold for $1,068,700, $13,500 less than it did in August, according to the Toronto Regional Real Estate Board. This is largely due to the fact that sales were unchanged from the previous month (though things are improving on an annual basis, coming in 8.6% higher than in 2023). Meanwhile, fresh supply continues to flood the market with new listings, which surged 35.5% year-over-year. Combined with easing mortgage rates, the average Toronto home buyer saw their required income shrink by $4,300, to $199,800.
Hamilton: Hovering below the historical average
Rounding out the top three cities is Hamilton, which has long been a popular Southern Ontario real estate destination, without the million-dollar price tag that characterizes neighbouring Toronto. The average home price in Hamilton in September came to $831,500, a decrease of $8,800 from August. The Association of Hamilton-Burlington reports that while sales were brisk in September, they continue to lag 2023 levels by 4% year-to-date and remain 28% below the long-term average. Meanwhile, new listings and inventory levels continue to rise, now sitting at a cumulative five months. That’s all cooled home prices, and as a result, Hamilton home buyers need to earn $158,740 to buy a home, $3,060 less than they did in August.
