The beginning of 2025 kicked off with fewer dwelling gross sales than many hoped. Actual property costs ticked larger in a lot of Canada’s main markets—and potential dwelling patrons noticed their buying energy shrink.
Ratehub.ca simply launched its newest January Affordability Report. (Each MoneySense and Ratehub.ca are owned by Ratehub Inc.) It covers the primary month-to-month snapshot of 2025 and located that affordability circumstances worsened in 12 of 13 markets. The offender was largely stagnant mortgage charges. The typical five-year fastened mortgage fee and corresponding stress check fee stayed the identical month over month, at 4.7% and 6.7%, respectively. In contrast to in a lot of the latter half of 2024, when decrease curiosity borrowing prices helped offset rising dwelling prices, dwelling patrons had little fee aid in January, with the most recent Financial institution of Canada (BoC) fee reduce occurring on the finish of the month.
In consequence, the required incomes to qualify for a mortgage on the average-priced properties rose in all however one of many markets tracked. The info, which measures how affordability circumstances are shifting on a month-over-month foundation, makes use of altering mortgage and stress check charges, in addition to actual property information from the Canadian Actual Property Affiliation (CREA).
Let’s check out how this affected the required earnings in housing markets throughout Canada.
Additionally learn
The perfect locations to purchase actual property in Canada
Housing affordability throughout Canada’s main cities
The chart under reveals how affordability developed between December 2024 and January 2025, in Canada’s fundamental housing markets, primarily based on the earnings required to qualify for a mortgage.
January 2025: How a lot do you want to earn to purchase a house in Canada?
To see extra information on these two charts, scroll the chart left to proper along with your fingers or press shift, as you employ scroll wheel in your mouse to learn.
| Metropolis | Common dwelling value Dec. 2024 | Common dwelling value Jan. 2025 | Change in dwelling values | Mortgage cost Dec. 2024 | Mortgage cost Jan. 2025 | Change in month-to-month mortgage costs | Dec. 2024 Revenue required (Stress check fee: 6.70% Mortgage fee: 4.70%) | Jan. 2025 Revenue required (Stress check fee: 6.70% Mortgage fee: 4.70%) | Change in earnings required |
|---|---|---|---|---|---|---|---|---|---|
| Hamilton | $798,600 | $819,500 | $20,900 | $4,184 | $4,294 | $110 | $170,400 | $174,450 | $4,050 |
| Halifax | $533,500 | $550,500 | $17,000 | $2,795 | $2,884 | $89 | $118,760 | $122,070 | $3,310 |
| Edmonton | $397,400 | $412,200 | $14,800 | $2,082 | $2,160 | $78 | $92,260 | $95,150 | $2,890 |
| Toronto | $1,061,900 | $1,070,100 | $8,200 | $5,564 | $5,607 | $43 | $221,650 | $223,290 | $1,640 |
| Montreal | $542,900 | $549,900 | $7,000 | $2,844 | $2,881 | $37 | $120,600 | $121,950 | $1,350 |
| Ottawa | $645,800 | $649,900 | $4,100 | $3,384 | $3,405 | $21 | $140,630 | $141,420 | $790 |
| Winnipeg | $359,200 | $363,200 | $4,000 | $1,882 | $1,903 | $21 | $84,820 | $85,600 | $780 |
| Regina | $313,400 | $316,300 | $2,900 | $1,642 | $1,657 | $15 | $75,900 | $76,470 | $570 |
| Vancouver | $1,171,500 | $1,173,000 | $1,500 | $6,138 | $6,146 | $8 | $243,000 | $243,300 | $300 |
| St. John’s | $366,300 | $367,600 | $1,300 | $1,919 | $1,926 | $7 | $86,200 | $86,450 | $250 |
| Victoria | $869,400 | $870,100 | $700 | $4,555 | $4,559 | $4 | $184,160 | $184,300 | $140 |
| Calgary | $572,400 | $573,100 | $700 | $2,999 | $3,003 | $4 | $126,350 | $126,470 | $120 |
| Fredericton | $341,100 | $338,800 | -$2,300 | $1,787 | $1,775 | -$12 | $81,300 | $80,850 | -$450 |
E-newsletter
Get free MoneySense monetary ideas, information & recommendation in your inbox.
Canadian cities the place affordability improved
The place in Canada is proudly owning a house turning into extra reasonably priced?
Fredericton: An outlier amongst tightening costs
Fredericton noticed booming actual property demand for a lot of 2024, and this previous January, too. In keeping with the New Brunswick Real Estate Board, gross sales rose 18% yr over yr within the first month of 2025. Nonetheless, that was barely outpaced by a 21% enhance in new listings, which helped cool off the benchmark value barely, coming in at $338,800 in January—$2,300 lower than in December 2024. With all different borrowing prices staying the identical, that helped decrease the required family annual earnings to get a mortgage by $450.
New Brunswick’s capital metropolis was the one metropolis tracked by the research to see dwelling affordability enhance, however the margin is razor skinny. The typical month-to-month mortgage cost for an average-priced dwelling within the metropolis decreased by a modest $12, to $1,775.
Canadian cities the place affordability worsened
So, 12 of 13 Canadian cities noticed affordability worsen in the course of the month of January; even a few of Canada’s lowest-priced markets discovered themselves on the prime of the listing.
Hamilton
Hamilton holds the doubtful title of town the place affordability declined essentially the most in January 2025; the benchmark dwelling value rose a whopping $20,900 on a month-to-month foundation, to $819,500. In consequence, the quantity a house purchaser would want to earn to get a mortgage rose by $4,050, whereas the month-to-month mortgage cost elevated by $110 to $1,320.
Total market circumstances have been pretty tender in Hamilton in January. Residence gross sales slowed whereas stock picked up, and a bigger ratio of higher-priced properties within the gross sales combine pushed dwelling costs larger, says the Realtors’ Association of Hamilton-Burlington.
“Although the uptick in new stock has prevented any vital motion in benchmark costs, the market has proven some variation. As of January, the regional benchmark value was $819,500—practically 1% larger than final yr,” reads the actual property board’s launch. “Nonetheless, this general enhance has been primarily pushed by development in indifferent properties, semi-detached models, and row properties. Condo-style models have skilled declines in pricing, reflecting the continued market shifts.”
Halifax: Tight stock drives costs larger
In keeping with the Nova Scotia Association of Realtors, dwelling gross sales nonetheless lag behind that of their five- and 10-year averages, however so too are the variety of properties on the market, which have helped hold shopping for circumstances pretty tight on the east coast. In Halifax-Dartmouth particularly, the variety of properties altering fingers ticked up simply 0.4% yr over yr, but the typical dwelling value nonetheless rose 5.5% on an annual foundation.
In keeping with Ratehub.ca’s research, the benchmark dwelling value in Halifax elevated by $17,000 in comparison with December, to $550,500. That resulted within the common required earnings for native mortgage candidates to extend by $3,310, and month-to-month mortgage cost to rise by $89, to $2,884.
Edmonton: Tight stock drives costs larger
Edmonton began the yr with brisk dwelling gross sales, with the Realtors’ Association of Edmonton reporting a 12.1% month-to-month uptick, and 11.2% from January 2024. Whereas new listings are additionally up strongly, gross sales exercise was sufficient to push dwelling costs within the metropolis larger, with a benchmark of $412,200 – up $14,800 from December ranges.
In flip, that’s prompted the required earnings to qualify for a mortgage to rise by $2,890, and the ensuing month-to-month mortgage cost to extend by $78, to $2,160.
How a lot mortgage are you able to afford? How a lot home can you purchase?
The Ratehub.ca research analyzes how affordability circumstances evolve on a month-to-month foundation in 13 of Canada’s main housing markets. It takes under consideration mortgage charges, the mortgage stress check, in addition to native dwelling costs, to calculate the required earnings wanted to buy the average-priced dwelling in every metropolis, in addition to what the month-to-month mortgage cost could be. Should you’re looking for a house and are curious as to how a lot you would afford, you possibly can crunch your personal numbers utilizing the MoneySense mortgage affordability calculator. You can too verify this desk to check mortgage charges in Canada proper now.
What’s subsequent for Canadian mortgage charges in 2025?
The outlook for Canadian mortgage charges stays considerably murky, following weeks of tariff-induced tumult. The specter of the US’ proposed tariffs has led to volatility within the bond market and shifted the trajectory for future BoC fee adjustments.
Mounted mortgage charges dropped within the first week of February 2025, as bond and inventory markets plunged in response to the signature of U.S. president Donald Trump’s first tariff govt order. This led to reductions within the fastened mortgage fee area, as lenders use bond yields because the pricing ground for his or her fixed-rate borrowing merchandise.
Whereas yields have largely stabilized after Trump introduced a 30-day tariff reprieve for Canada, fastened charges have but to creep again up. In truth, as we speak’s fee buyers have entry to five-year phrases below the 4% range. However given how unpredictable Trump’s financial insurance policies and the market reactions might be, it’s unclear how lengthy the present pricing will stick round. It’s a good suggestion for anybody seeking to lock in to discover their choices now and benefit from a fee maintain.
In the meantime, there’s been whiplash for anybody making an attempt to observe the variable mortgage fee area. On the top of the early February tariff headlines, a number of economists forecasted that the tariffs would pressure the BoC to aggressively reduce its goal in a single day lending fee—which prime and variable charges are primarily based on—a lot decrease than beforehand anticipated, probably right down to 1.5%.
Nonetheless, because it now appears extra seemingly that tariff threats shall be used for leverage, these fee reduce calls have been walked again. It’s now largely anticipated that the central financial institution will maintain its fee unchanged in its upcoming March 12 fee announcement, and is on monitor to make simply two extra quarter-point cuts this yr, which might convey its fee right down to 2.5%. That can usher in some further fee aid for debtors. However don’t be stunned if the outlook adjustments once more over the approaching months.
Learn extra about mortgages:
- Where to buy real estate in Canada
- The complete guide for first-time home buyers in Canada
- Tools to calculate your mortgage payments and costs in Canada
- Mortgage refinance calculator
- Mortgage renewal calculator
This text was created by a MoneySense content material companion.
That is an unpaid article that accommodates helpful and related info. It was written by a content material companion primarily based on its experience and edited by MoneySense.
The publish Why are mortgages so expensive in Canada? appeared first on MoneySense.
