When Did Middle-Class Housing Become Unaffordable?

The answer to that question depends on where you live

Feb 17, 2025

By determining when a place's WHAM Score was last under 150, we can identify when single-family homes became unaffordable to the middle class.
This analysis shows that unaffordability has spread across Canada in waves.
We identify four distinct periods in which the middle class was priced out of housing: Pre-2006, Ontario’s Musical Chairs Migration (2015-18), the COVID Price Boom (2020), and the Post-COVID Rate Hike Era (2022). This leaves only nine to ten (of 51) Canadian markets where housing is still affordable to the middle class.

Last week, we showed that the number of affordable markets for the middle class had dropped from 41 in January 2005 (the start of CREA’s home price data) to only 9 today. That analysis naturally raises the question, “When did these markets stop being affordable”?

To answer this question, we used our WHAM data set to identify the last time each market had a WHAM score of under 150. We found that the country did not experience “creeping unaffordability” but rather a distinct series of waves of unaffordability.

Wave 1: Pre-2006 Unaffordability (12 Markets, All in B.C. and Ontario)

We occasionally get comments from readers and listeners to the effect of “What do you mean, when did housing become unaffordable? Housing has always been unaffordable!” Invariably, this person has lived most of their life in either the Greater Toronto Area or the Greater Vancouver Area. In our data set, which begins in January 2005, ten markets have always had a WHAM score of above 150. A 12th market, Interior B.C., crossed into unaffordability in March 2005.

Markets: 6 in Ontario (Greater Toronto, Mississauga, Oakville-Milton, Mississauga, Guelph, Ottawa) and 6 in British Columbia (Greater Vancouver, Lower Mainland, Fraser Valley, Chilliwack and District, Victoria, and Interior B.C.)

Wave 2: Ontario’s 2015-18 Musical Chairs Migration (15 Markets, 13 in Ontario)

There are two obvious questions here:

Why (with one exception), did these markets all get unaffordable at roughly the same time?
Why (with two exceptions) were these markets all in Southern Ontario?

The answer is “Ontario’s Great Musical Chairs Migration”. The year 2015 was the year that a growing number of families started to move out of the Greater Toronto Area1 and scattered across southern Ontario.

Figure 1. Net interprovincial (within-province) migration out of the Greater Toronto Area, number of persons

Source: Statistics Canada Table 17-10-0149-01.

This period of increased population outflow also coincides with the beginning of a population boom in Ontario. A combination of increased immigration, a rapidly growing population of non-permanent residents (including international students and temporary foreign workers), and the collapse of global oil prices, which saw Ontarians return home from Alberta, caused this population boom.

Figure 2. Population growth, Ontario, number of persons

Source: Statistics Canada Table 17-10-0005-01.

Despite this population boom, the GTA was unable to sufficiently increase the construction of family-sized homes, including single-detached, semi-detached, and row units. Construction of these units has been in steady decline since 2005, in large part due to the tightening of land-use policies and increased municipal taxes on new construction, themes we discuss in the report Forecast for Failure.

Figure 3. Single-Detached, Semi-Detached and Row Housing Unit Completions for the Greater Toronto Area (Toronto CMA) by Year

Source: CMHC Housing Market Information Portal

A shortage of family-sized homes led to escalating prices, causing families to “drive until they qualified” to less expensive southern Ontario markets. This migration created a musical chairs effect, cascading unaffordability through the province. Over a dozen markets in southern Ontario became unaffordable when waves of families priced out of the Greater Toronto Area moved in.

The Hamilton-Burlington market first became unaffordable in January 2010, thanks to the increased migration of young families from the GTA. Between January 2015 and November 2018, a dozen other Ontario markets followed suit:

Barrie and District (Jan. 2015)
Kitchener-Waterloo (Dec. 2015)
Cambridge (Mar. 2016)
Lakelands (Apr. 2016)
Northumberland Hills (Jul. 2016)
Brantford (Dec. 2016)
Kawartha Lakes (Jan. 2017)
Niagara Region (Jan. 2017)
Peterborough and Kawarthas (Feb. 2017)
Woodstock-Ingersoll (Nov. 2017)
London-St. Thomas (Jan. 2018)
Windsor-Essex (Nov. 2018)

Two non-Ontario markets also became unaffordable during this period: Vancouver Island (Apr. 2016) and Montreal CMA (Nov. 2016).

Wave 3: COVID Price Boom - May 2020 to Feb 2021 (10 Markets, 8 in Ontario)

Record levels of monetary and fiscal stimulus, along with the increased ability to work remotely, caused home prices to skyrocket during this period. These factors caused families to move out of larger, more expensive cities to the rest of the country. Lower 5-year mortgage rates partially offset this from an affordability perspective. The overall impact was a substantial deterioration in affordability, particularly in smaller communities in Ontario.

Eight markets in Ontario became unaffordable during this period, with five of those eight reaching that threshold in May and June 2020:

Grey-Bruce-Owen-Sound (May 2020)
Kingston and Area (May 2020)
Simcoe and District (May 2020)
Huron-Perth (Jun. 2020)
Quinte and District (Jun. 2020)
Rideau-St. Lawrence (Jul. 2020)
Tillsonburg District (Sep. 2020)
Bancroft and Area (Feb. 2021)

Ontarians also moved to other cities, which helped contribute to Halifax-Dartmouth (May 2020) and Calgary (Feb. 2021) joining this list.

Wave 4: Post-COVID Rate Hike Era - Feb 2022 to May 2023 (5 Markets in 4 Provinces)

Five-Year Mortgage Rates slowly started to increase in November 2021, then rose 200 basis points from February 2022 (3.58%) to August 2022 (5.58%), eventually peaking at 6.47% in November 2023.

Figure 4. Five-Year Mortgage Rates by Unaffordability Era

Source: Statistics Canada Table 34-10-0145-01.

In some markets, these rate hikes caused a partially offsetting price reduction. However, in other, less expensive markets, prices kept rising, often due to an influx of new residents looking for attainable family-sized housing. The double whammy of higher rates and prices that continued to rise caused five of Canada’s traditionally more affordable markets to cross into unaffordability:

Saskatoon (Feb. 2022)
Quebec City CMA (Aug. 2022)
Winnipeg (Dec. 2022)
Edmonton (Feb. 2023)
Estrie (May 2023)

Markets That Are Still Affordable (9-10 Across Canada)

There are currently nine markets in Canada that still meet the middle-class affordability standard set by WHAM Scores: Regina, North Bay, Sault Ste. Marie, Centre du Quebec, Mauricie, Fredericton, Saint John, Prince Edward Island, and St. John’s.

A 10th market, Greater Moncton, has straddled the line between affordability and unaffordability in recent years. Since March 2022, its WHAM score has fluctuated between 136 and 162. As of December 2024, it had a score of 152.1 (unaffordable), after a November 2024 score of 148.3 (affordable).

Final Thoughts

The “location, location, location” mantra in real estate applies to the middle-class affordability crisis. The moment housing became unaffordable to middle-class families depends on where you look. It started in the Greater Toronto and Great Vancouver areas decades ago, spreading across large parts of Southern Ontario during the 2015-18 population boom. The increase in remote work caused by COVID-19 and the unprecedented amounts of monetary and fiscal stimulus in the first 18 months of the pandemic caused unaffordability to spread to the rest of Southern Ontario, along with Halifax and Calgary. Finally, the post-pandemic interest-rate spike and continued migration led formerly affordable cities like Quebec City, Winnipeg, and Edmonton to become unaffordable.

As of the end of 2024, the only affordable markets are in Atlantic Canada, Northern Ontario, parts of the Prairies and smaller communities in Quebec. Anyone suggesting that middle-class families struggling to find housing should “pick up and move somewhere affordable” needs to recognize that Canada is quickly running out of affordable communities.