The sum of the three rate cuts passed by the Bank of Canada since June dropped the cumulative cost of borrowing for Canadians by 75 basis points, from 5% to 4.25%, giving homebuyers much-needed affordability relief.
This is according to the latest affordability report compiled by Ratehub.ca, which includes the minimum annual income required to buy a median home in some of Canada’s largest 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 shows how changing mortgage rates, stress test rates and real estate prices affect the income needed to buy a home.
The September edition (which is updated monthly, so bookmark this page) shows required income has fallen in 11 of the 13 housing markets studied, as the five-year mortgage rate fell to 5.04%, compared to 5.16% in August. As a result, the corresponding average mortgage stress test rate—which amounts to an additional 2% on borrowers’ loan agreement rate—dropped to 7.04% from 7.16%.
Let’s take a look at how that has affected home buyers across Canada.
The best places to buy real estate in Canada
Housing affordability in all major Canadian cities
Check out the chart below to see how affordability changed between August and September in Canada’s major housing markets, based on the income required to qualify for a loan.
September 2024: How much do you need to buy a home in Canada?
| The city | Average home price August | Average home price September | Change in home value | Income is required August | Income is required September | Change in income |
|---|---|---|---|---|---|---|
| Vancouver | $1,195,900 | $1,179,700 | $16,200 | $224,000 | $219,000 | $5,000 |
| In 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 |
| In 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 accessibility has been improved
Where in Canada is there to have an affordable home?
Vancouver: A cold start to the fall market
Vancouver tops the list of cities with the most improved affordability, largely because the median home price has dropped $16,200 since August. Make no mistake,—this is still the most expensive housing market in Canada with an average property price of $1,179,700. But demand has been very cool coming out of the summer months. According to Greater Vancouver Realtors, sales fell 3.8% year-over-year in September, while new listings rose 12.8%, leading to an easier buyer’s market. Because of this, Vancouver homebuyers need to earn $5,000 less than they did last month to qualify for a mortgage on a home of average value, with an income of $219,000.
Toronto: Flat sales month
The city of Toronto came in second, as home prices continued to decline in 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 mainly due to the fact that sales were unchanged from the previous month (although things are improving every year, reaching 8.6% more than in 2023). Meanwhile, new supply continues to flood the market with new listings, up 35.5% year over year. Combined with lower mortgage rates, the average Toronto consumer saw their required income drop by $4,300, to $199,800.
Hamilton: You’re 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 neighboring Toronto displays. The average home price in Hamilton in September was $831,500, down $8,800 from August. The Association of Hamilton-Burlington reports that while sales were the fastest 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 five-month highs. Those are all cool home prices, and as a result, Hamilton home buyers need to earn $158,740 to buy a home, $3,060 less than they earned in August.
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