Edmonton Among Few Cities to See Homeownership Cost Improvement

A recent report from the Fraser Institute highlights a concerning trend in housing affordability across Canada from 2014 to 2023. While most major cities faced rising challenges, Edmonton emerged as one of the few urban centers to experience a slight improvement in homeownership costs.

The study reveals that housing prices and rents have escalated significantly, outpacing the growth of median after-tax family income over the past decade. As a result, prospective homeowners in almost every major Canadian city now confront escalating barriers, including larger down payments and increased mortgage costs.

Between 2014 and 2023, the average amount required for a 20 percent down payment on a typical home surged from approximately 14.1 months of median family income to a staggering 22 months, marking a 56 percent increase. Furthermore, mortgage payments rose sharply, consuming 56.6 percent of income by 2023, up from 29.9 percent in 2014. The findings indicate that by 2023, no major city in Canada offered homes that were affordable for families earning the local median income without requiring exceptionally large down payments or financial assistance.

National Trends in Rental Affordability

Renters were not spared from these affordability pressures. The median rent across all unit types climbed from 19.8 percent to 23.5 percent of median after-tax income nationally, with nearly all cities witnessing a decline in rental affordability. Despite varying conditions across the country, Vancouver and Toronto stood out as the least affordable markets throughout both 2014 and 2023.

Cities in Quebec, the Prairies, and Atlantic Canada generally fared better, although most still saw their affordability diminish. Notably, Edmonton, along with Regina, Saskatoon, and St. John’s, was one of the only cities where the months of income required for a 20 percent down payment actually decreased. This improvement can be attributed to a better ratio of benchmark home prices to local median incomes.

Impact of Rising Interest Rates

Despite this positive trend in down payment affordability, Edmonton, like other cities, experienced an uptick in mortgage payments as a larger share of income was consumed by higher interest rates. The report underscores that the overall affordability crisis in the housing market persists, affecting both homeowners and renters across the nation.

The full report from the Fraser Institute is available on their website, providing further insights into the evolving landscape of housing affordability in Canada.