Canada Housing Research Brief

Declining prices begin to offset rising interest rates. The higher cost of borrowing has cooled Canada’s housing market. Prices fell for the sixth consecutive month in August, decreasing 1.7 per cent from July, which is 8.4 per cent below the peak during the global health crisis. With these lower prices, affordability is becoming slightly more attainable as the annual income needed to purchase a home in Canada dropped between June and August. Declining prices are now beginning to outweigh rising interest rates in Canada’s uphill battle to achieve affordability. In Toronto, the annual income needed to purchase fell by $12,550, in Vancouver it decreased by $8,100 and in Montreal it dropped by $3,330. Nonetheless, Canada’s housing problem has not been alleviated as interest rates are expected to increase further. More supply is needed to achieve long-term affordability.