For the first time in years, housing affordability in Canada is meaningfully improving — but according to RBC Economics’ June 2026 Housing Affordability Report, that window may be starting to close. Here is the full picture: what affordability looks like right now in Ontario and across Canada, which markets have recovered the most, and what buyers need to do before conditions reverse.
How RBC Measures Housing Affordability
RBC’s affordability measure calculates the percentage of median pre-tax household income required to cover ownership costs — mortgage principal and interest (assuming 20% down, 25-year amortization, 5-year fixed rate), property taxes, and utilities. A lower percentage = more affordable. Historically, readings below 35% represent broadly affordable conditions; above 50% represents severely unaffordable territory.
RBC Affordability Measures — June 2026
| Market | Condo Affordability | vs. Q4 2019 | vs. Peak (2022–2023) |
|---|---|---|---|
| Canada (National) | 35.2% | Near 2019 levels (<1 ppt difference) | Significantly improved |
| Toronto | 36.1% | Better than 2019 (was 38.5%) | Major improvement from 60%+ peak |
| Victoria | 31.8% | Better than 2019 (was 32.2%) | Substantial recovery |
| Vancouver | Still elevated — worst in Canada | Still above 2019 levels | Improved but far from restored |
Toronto’s condo affordability at 36.1% — better than its pre-pandemic 2019 reading of 38.5% — is a remarkable shift from the 60%+ readings at the 2022 peak. This means a household earning Toronto’s median income can now allocate a smaller share of income to condo ownership than at any point since before the pandemic.
What’s Driving the Improvement
- Condo price corrections: Toronto condo prices have fallen 6.3% year-over-year to ~$466,900 — a significant reduction in the base ownership cost.
- Mortgage rate decline from 2023 peaks: Rates falling from 5.0%–5.5% in 2023 to 3.89%–4.09% in July 2026 has meaningfully reduced monthly payments for the same purchase price.
- Income growth: Canadian median household incomes have grown modestly while home prices fell — a rare combination that improves the affordability ratio from both sides.
RBC’s Warning: Relief May Be Running Its Course
Despite the improvements, RBC explicitly warns that “the pace of progress may be slowing.” Three forces threaten to reverse the affordability gains of the past 18 months:
- Fixed rates rising from January 2026 lows: The bond yield spike from the Iran war pushed 5-year fixed rates from 3.89% to 4.14%–4.24% between January and June 2026 — partially eroding the rate-driven affordability improvement. (Rates have since eased back to 3.89%.)
- Sales recovery boosting prices: GTA sales are up 9.4% year-over-year in June, and the board is predicting price growth ahead. If sales momentum continues, prices will recover — reversing the price-driven affordability improvement.
- RBC’s 2027 rate hike forecast: RBC projects the BoC will raise its policy rate to 3.25% in 2027 as the economy normalizes. This would push prime rates to ~5.45% and significantly increase monthly ownership costs for variable rate holders and renewers.
What Affordable Means in Dollar Terms — Ontario 2026
| Property Type / City | Avg Price (May 2026) | Income Needed (20% down, 3.94% rate) |
|---|---|---|
| Toronto Condo | ~$466,900 | ~$88,000 |
| GTA Freehold (benchmark) | $946,500 | ~$175,000+ |
| Mississauga / Brampton (detached) | ~$850,000–$1,050,000 | ~$155,000–$195,000 |
| Durham / Hamilton / KW | ~$650,000–$800,000 | ~$120,000–$148,000 |
Toronto’s median household income is approximately $98,000–$129,000 — meaning condos are now within reach for median-income households, but freehold homes in the GTA require substantially above-median incomes or dual-income households.
Calculate your affordability and see today’s best rates at mrates.ca — Ontario’s most current mortgage comparison, updated daily.