Ron Butler, a mortgage industry veteran of three decades, highlighted the significant shift in home affordability over the years. In the past, individuals with modest incomes could easily save up a five percent down payment for a home, but that scenario has changed drastically. Speaking at a parliamentary finance committee hearing on household debt in Canada, Butler emphasized the challenges faced by individuals with solid full-time jobs in the Greater Toronto Area. He stated that it is virtually impossible for someone earning around $110,000 to accumulate a sufficient down payment for a home priced just under a million dollars, considering expenses like rent, taxes, and daily living costs.
Before 2015, a family earning $115,000 annually had opportunities for homeownership, albeit in areas like Ajax, Burlington, Hamilton, or the Niagara region. However, the current housing market reality makes it increasingly difficult for individuals with similar incomes to afford a home. The Canadian Real Estate Association reported that the national average home price stood at $673,084, requiring a minimum down payment of over $42,000. In metropolitan areas like Greater Toronto and Greater Vancouver, where average prices exceed a million dollars, the minimum down payments soar to approximately $76,000 and $95,000, respectively.
The housing affordability crisis extends beyond major cities like Toronto and Vancouver, affecting other regions as well. Mike Moffatt, a researcher at the University of Ottawa, noted the spread of unaffordability to various locations in recent years. Analyzing data from March 2026, it was revealed that a person would need an income of around $122,300 in Calgary, $127,800 in Montreal, and $132,100 in Ottawa to afford a 10 percent down payment, annual taxes, and heating costs.
Reports from the Missing Middle Initiative indicated a significant increase in home prices compared to income levels over the years, with new homes becoming more expensive relative to median incomes. The escalating prices coupled with stagnant wage growth have worsened the situation for Canadian households, leading to a sharp rise in home price-to-income ratios.
Furthermore, Butler highlighted the trend of prospective homebuyers in Ontario and British Columbia primarily falling within the top earners’ bracket or relying heavily on parental financial support. The increasing reliance on parental assistance or accumulated home equity has become a common practice for individuals looking to purchase property. The escalating costs of homebuilding and the lack of new constructions pose a challenge to housing affordability, risking a scenario where new homes cannot compete with resale market prices.
Moffatt emphasized the importance of wage growth in addressing the housing affordability crisis, stating that increased wages need to outpace housing price growth to achieve true affordability in the market.
