Canadian real estate is the most affordable it’s been in years, but it’s far from normal. The RBC Housing Affordability Measures (HAM) shows things improved in Q1 2026, marking the most attainable level in the past 4 years. The catch? Even with the improved affordability, conditions are equal to the 90s real estate bubble. RBC warns we may be past peak improvements already, as the driving factors are now behind us.
Canadian Housing Affordability Is The Best In 4 Years, Roughly The Same As The 90s Bubble
RBC Canadian Housing Affordability Measure (HAM): The share of income a median household needs to carry the payments on a home.
Source: RBC; Better Dwelling.
Canada continues to see persistent improvements in affordability, measured as ownership carrying costs as a share of median household income. The bank’s measure fell 1.4 points to 53% in Q1 2026, 3.9 points lower than last year and 10.6 points below the record high in Q4 2023. National housing affordability is now roughly where it was in Q1 2022, when the rate began to rise from record lows.
A little context might be helpful. Prior to the 2020-low rate bubble, the index was 42.7 in Q4 2019—slightly over the long-term average of 41.9%, but more than 10 points lower than today. A buyer today faces the same conditions as just before rates began to climb from record lows. It’s roughly the same level as Q2 1990, the peak of the 1990s real estate bubble. Today’s buyers have seen one of the sharpest affordability improvements on record, and it’s about as affordable as it was during the worst bubble in history.
The improvements are also driven by a single segment. Condo apartments slipped to 35.2% in Q1 2026, less than a point from their pre-pandemic levels. Meanwhile, single-family detached homes have climbed 1.2 points to 59.2%, 4.2 points higher than last year. That means most relief is in condo-heavy markets like Toronto, with a limited impact in low-rise cities. That relief is also already fading.
RBC Warns Peak Relief Is Fading, Home Prices On The Rise Again
Housing affordability has provided limited relief, but improvements are already fading. RBC notes the price of a typical home in Canada increased 1.9% in the quarter to $792,000 in Q1 2026, 3.9% higher than last year.
“The phase of diminishing ownership costs could be nearing an end. Prices appear to be stabilizing in most major markets, and we don’t see additional interest rate cuts from the Bank of Canada this year,” explains RBC Assistant Chief Economist Robert Hogue.
“That means income growth would have to do a lot of the heavy lifting to see additional affordability gains—though labour market softness may limit the scope of that relief.”
Montreal Condos Less Affordable Than Toronto, Halifax Closes In
Condo ownership costs as a share of median income, by major real estate markets.
Source: RBC; Better Dwelling.
The relief isn’t just concentrated in condos, but also by region. Most provinces continue to approach new record highs, with price corrections largely concentrated in BC and Ontario. It’s led to a distortion where smaller markets that haven’t seen a correction are now looking relatively expensive to frothier regions.
UBS has consistently ranked Toronto among the largest real estate bubbles in the world. The share of income needed for a condo in Toronto (36.1%) is now lower than in Montreal (36.3%). “Montreal’s condo affordability index has even crested over Toronto’s for the first time in 16 years,” notes RBC.
The share of income for a condo in Halifax (33.4%) is also fewer than 3 points from Toronto. “That’s the closest Halifax has been to Canada’s second most expensive market in more than a decade,” notes Hogue.
Maybe this time is different. Halifax is projected to be the next Monaco, right?
The biggest disconnect is the industry keeps saying it’s back to affordable but they’re only looking at the cost of the homes, not the fact they’re trying to cram people in homes half the size for the same cost.
Can’t have a full sized house in Nova Scotia. There’s no land, it’s all being used for rocket launch pads.
They’re building launch pads to blast their young adults out of the province, so they can live somewhere they can afford.
How does RBC see the improvements next quarter without rate cuts and price drops? They genuinely see wages for the median household rising faster than inflation?
Easy. They made it up. Anyone else notice their historical payment data also magically increased? Apparently the Bank of Canada must be cutting rates in the past too!