If you feel like buying a home in Canada is harder than ever, you’re not imagining it. Housing affordability has been on a steep decline over the past decade, and despite recent interest rate cuts, many Canadians still struggle to break into the market. According to the Canadian Real Estate Association (CREA), the average home price remains well above $700,000, with urban centres like Toronto and Vancouver consistently ranking among the least affordable cities in North America.
So why does affordability remain such a challenge, and more importantly, what can you do about it?
Why Housing Affordability Is Still So Bad
Stagnant Wages vs. Rising Home Prices
Home prices have skyrocketed over the past two decades, while income growth has lagged significantly behind. This widening gap makes saving for a down payment increasingly difficult for first-time buyers.
High Interest Rates and Borrowing Costs
Even though rates have started to come down in 2025, they’re still much higher than they were in the early 2020s. That means buyers qualify for smaller mortgages, and monthly payments remain heavy for many homeowners.
Housing Supply Shortages
Canada doesn’t build enough homes to meet demand. Immigration-driven population growth, combined with zoning and construction delays, continues to put upward pressure on prices.
Mortgage Stress Test
The mortgage stress test requires borrowers to qualify at a higher rate than they pay. While it protects against default risk, it also keeps many would-be buyers locked out of the market.
What You Can Do to Navigate the Housing Market
Affordability challenges are real, but they don’t mean homeownership or investing is impossible. Here are a few strategies:
Consider Alternative Lenders
Big banks may not always offer the most flexible options. Mortgage brokers, like Cannect, can connect you with alternative lenders who understand unique income situations and offer competitive rates.
Explore Variable-Rate Mortgages
With interest rates trending downward, a variable mortgage could mean lower payments over time compared to a fixed-rate mortgage.
Leverage Home Equity
If you already own a home, tapping into your equity with a home equity loan can help you consolidate debt or fund renovations, improving your financial position without selling.
Invest in Real Estate Indirectly
If affordability makes direct homeownership tough, you can still participate in the housing market through investments like Mortgage Investment Corporations (MICs), which generate attractive returns from real estate-backed lending.
The Bottom Line
Housing affordability in Canada may be at historic lows, but there are smart ways to navigate the challenge. With the right mortgage strategy and the right partner, you can still achieve your goals, whether that’s buying your first home, refinancing for lower payments, or growing your wealth through real estate investments.
At Cannect, we help Canadians find solutions beyond the banks, lower fees, unbiased advice, and flexible mortgage options designed around your needs.
Talk to us today to find out how we can help you take control of your financial future.
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