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With lawmakers on how to make housing more affordable, Ottawa’s fiscal regulator has cut off this affordability gap nationwide – but things look very different across the country.
Interim Parliamentary Budget Official Jason Jacques released an updated housing report Thursday. The report measures affordability based on the gap between average housing prices and what a typical household can afford.
The report said the gap narrowed from 80% in September 2023 to 34% in August.
Cheaper borrowing costs, higher wages and lower housing prices make it easier for Canadians to afford homes and pay mortgages, PBO said.
House prices peaked in 2022 in the era of pandemic recovery, but then in many markets where banks quickly raised their benchmark interest rates to more than 5%.
Today, after a series of cuts, the policy rate is 2.5%, helping to reduce mortgage costs. Meanwhile, housing prices have not returned to their early stages.
The most expensive market in Canada has the most affordable market in the past three years, PBO said.
In Toronto and Hamilton, the most significant improvements are the most important, but the PBO notes that house prices in these markets are still higher than affordable.
In Halifax, the affordability gap is 74%, while the four gaps in Edmonton are the smallest of any major metropolitan area included in the analysis.
Calgary, Montreal and Quebec have the worst affordability, but the PBO says the cost of carrying mortgages in these cities is still relatively low.
The report also measures household financial stability based on mortgage debt services ratios, which is the share of household income that pays off home loans.
PBO said that “significant progress” was made in the first half of 2025 in returning housing affordability to 2019 levels.
While these ratios have increased in Toronto, Vancouver and Victoria, the PBO warns that households in these still expensive markets are more financially vulnerable than elsewhere in Canada.
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Affordability Gap Craig Lord Housing Affordability Jason Jacques PBO Report Canadian News
Last modified: October 2, 2025
