The 46-year Canadian Housing Divide

In 1980, the average Canadian home cost about 2.8 years of household income. Today, it costs nearly 8 years of average income.

Home prices have risen +900% since 1980.

Median household income has risen just +258%.

In real terms, household purchasing power has barely changed in 46 years — but the cost of a home has exploded far beyond income growth.

What drove prices so far from incomes?

• Falling interest rates increased borrowing power

• Population growth outpaced housing construction 

• Zoning and permitting restricted supply

• Housing became Canada’s primary investment asset

• Income growth failed to keep pace with home prices

Small differences in growth rates compound dramatically over decades. That’s how housing detached from incomes.

Sources: CREA national average home prices; Statistics Canada Census, Survey of Consumer Finances, and Canadian Income Survey for median household income; Bank of Canada CPI data for inflation adjustment.