Mar 4, 2026
Canada’s housing affordability crisis is spreading beyond its two most expensive cities, according to a new index report from the Canada Mortgage and Housing Corporation (CMHC).
CMHC’s latest Housing Affordability Composite Index shows affordability pressures have spread to cities such as Ottawa, Montréal and Halifax, even as national conditions show modest signs of improvement.
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The findings come as construction momentum slows and parts of the condo market remain under strain, making a quick turnaround in affordability increasingly unlikely.
Affordability deterioration broadened after 2020
According to CMHC, national homeownership affordability peaked in 2001 before eroding in three waves: 2001 to 2007, 2015 to 2020, and 2020 to 2023.
The first two declines were largely driven by the Toronto and Vancouver markets. But after 2020, deterioration accelerated and spread to Ottawa, Montréal and Halifax — a shift CMHC has previously linked to pandemic-era remote work and increased labour mobility.
Since 2023, homeownership affordability has improved modestly in Ottawa, Toronto, Vancouver and Halifax, and stabilized in Montréal, Calgary and Edmonton. Still, CMHC cautions that conditions remain stretched relative to long-term averages.
For buyers, that means cooling prices and stabilizing rates have provided some relief, but affordability has not seen a reset to pre-pandemic norms.
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Get StartedRental affordability squeezed by inflation
In terms of rental affordability, CMHC’s latest index suggests that rental market erosion was more recent and less severe, but geographically broader, relative to homeownership. Sharp inflation in 2022 and 2023, combined with strong immigration levels, compressed renters’ budgets nationwide.
Because renters typically have less discretionary income and limited borrowing flexibility, rising costs can significantly reduce their ability to absorb rent increases.
The report also demonstrates persistent regional divides. Rental markets in Toronto and Vancouver, for example, have remained below historical affordability averages since 2006, while Montréal and Edmonton have remained comparatively more affordable. Ottawa, Halifax and Calgary have gradually become less affordable over time.
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CMHC notes that elevated condominium inventories in Toronto and Vancouver are increasing secondary rental supply as unsold units are leased out. That is pushing vacancy rates higher and slowing rent growth in higher-end segments. More affordable rental units, however, remain tight, with limited new supply.
Slowing construction may delay broader relief
In a separate update, CMHC reported that the six-month trend in housing starts fell 3.5% in January to 254,794 units (seasonally adjusted annual rate), marking a fourth consecutive monthly decline. The monthly SAAR dropped 15% from December.
“Near-term improvements in housing supply are unlikely,” said deputy chief economist Tania Bourassa-Ochoa in a statement, citing trade uncertainty, high construction costs, weaker demand and rising inventories.
Among major cities, Vancouver posted a 37% year-over-year increase in January starts, while Toronto declined 2% and Montréal fell 44%.
For consumers, the overall message continues to be complex. Some ownership markets are showing modest improvement as price growth cools and borrowing conditions stabilize, but affordability remains stretched compared to historical standards.
In the rental market, while pressures have eased somewhat at the higher end, affordable units still remain scarce. And slowing construction across Canada suggests new supply may not arrive quickly enough to meaningfully reset conditions in the near term.
For buyers and renters alike, the signs point to a housing market that may be less volatile compared to recent years, but still structurally constrained, with any affordability gains likely to come gradually.
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Steven Brennan is a freelance finance writer based in Vancouver, BC. He holds a BA and an MA from Maynooth University, Ireland. His work regularly appears at Canadian Mortgage Trends, Lowest Rates, Loans Canada and other Canadian and US brands, while also working as a ghostwriter for financial influencers.
