Canada Housing Market

A six-figure salary used to feel like a major financial milestone.

But in some of Canada’s biggest housing markets, even earning around $110,000 a year may no longer be enough to comfortably buy a home.

That is especially true in places like Toronto and Vancouver, where home prices remain high, mortgage qualification rules are strict, and everyday living costs continue to make it harder for buyers to save a down payment.

Buying A Home Is Still Out Of Reach For Many Canadians

Canada’s housing affordability has improved from its worst point, but ownership is still extremely expensive.

RBC reported that its national housing affordability measure improved for the eighth consecutive quarter in Q4 2025, falling to 52.4% from a peak of 63% at the end of 2023. A lower number means affordability has improved, but 52.4% still means ownership costs are taking up a very large share of household income. 

In Toronto and Vancouver, the numbers are even more difficult.

RBC said affordability gains have become “weaker and sparser” across Canada, meaning the recovery in affordability is starting to slow. 

Why $110K May Not Go As Far As People Think

A $110,000 salary sounds high on paper.

But after taxes, rent, food, transportation, insurance, debt payments, and other living costs, many buyers are left with much less money to save.

Mortgage qualification rules also matter. RBC notes that, as a general guideline, no more than 30% to 32% of gross annual income should go toward mortgage-related expenses, including principal, interest, property taxes, heating costs, and condo fees. 

That becomes difficult when home prices are still high and buyers also need to pass Canada’s mortgage stress test.

Ratehub.ca reported that in March 2026, housing affordability worsened in 10 of 13 major Canadian markets, largely because home prices increased. The average mortgage stress test rate used in its analysis was 6.39%. 

Toronto Remains One Of The Hardest Markets

Toronto is one of the clearest examples of the affordability gap.

Even after price declines from the 2022 peak, many homes in the GTA remain expensive compared with local incomes.

CMHC’s 2026 Housing Market Outlook said Ontario prices are expected to keep falling in 2026, especially in the most expensive urban centres, because of high inventory and slower sales. But even with softer prices, affordability remains a major issue. 

That is the problem for many buyers.

Prices may be down from the peak, but they are still not low enough for many middle-income or even higher-income households to enter the market comfortably.

The Down Payment Problem Is Huge

The challenge is not just qualifying for a mortgage.

It is saving the down payment in the first place.

In expensive cities, buyers often need tens of thousands of dollars upfront, and in some cases much more. That includes the down payment, closing costs, land transfer taxes, legal fees, moving costs, and emergency savings.

For renters already paying high monthly costs, saving that amount can be extremely difficult.

This is why many first-time buyers are increasingly relying on family help, dual incomes, or moving farther away from major job centres.

Canada’s Housing Problem Is Bigger Than Interest Rates

Lower mortgage rates can help, but they do not solve the full affordability problem.

The Bank of Canada has warned that improving affordability requires a better balance between housing supply and demand, and that achieving that balance will take time. 

CMHC has also said Canada needs millions of additional homes by 2030 to restore affordability. That means the issue is not just about what buyers earn – it is also about how much housing Canada has and what types of homes are being built.

What This Signals For Canadian Buyers

A $110,000 salary is still a strong income in Canada.

But in major housing markets, it may not be enough to buy a home without a large down payment, a second income, family support, or major lifestyle trade-offs.

For younger buyers, the message is frustrating but clear: the old rules no longer apply.

A good salary does not automatically mean homeownership is within reach.

Until incomes, home prices, borrowing costs, and housing supply move into better balance, many Canadians will continue to feel locked out of the market – even with six-figure paycheques.

References

Bank of Canada. (2024). Changes to mortgage structure will not resolve housing affordability. Reuters.
https://www.reuters.com/world/americas/bank-canada-says-changes-mortgage-structure-will-not-resolve-housing-2024-11-06/

Canada Mortgage and Housing Corporation. (2026). Housing Market Outlook 2026.
https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/housing-market/housing-market-outlook

Ratehub.ca. (2026). Canada housing affordability and market trends.
https://www.ratehub.ca/mortgages/canada-housing-affordability

RBC Economics. (2026). Affordability gains become weaker and sparser in Canada.
https://www.rbc.com/en/economics/canadian-analysis/canadian-housing/housing-affordability/affordability-gains-become-weaker-and-sparser-in-canada/

RBC Royal Bank. (2026). Know how much home you can afford.
https://www.rbcroyalbank.com/mortgages/how-much-can-you-afford.html