Edmonton Sees Minor Home Ownership Improvement Amid National Decline

A recent report from the Fraser Institute highlights a troubling trend in housing affordability across Canada, revealing that between 2014 and 2023, the cost of home ownership generally worsened. However, Edmonton stands out as one of the few major cities to experience a slight improvement in the upfront costs associated with buying a home.

The study indicates that home prices and rents have surged significantly, outpacing the growth of the median after-tax family income over the past decade. This trend has created substantial barriers for first-time homeowners, who now face larger down payments and higher mortgage costs. The report shows that in the average Canadian city, the amount of income needed for a 20 percent down payment on a typical home increased dramatically from approximately 14.1 months of median family income in 2014 to 22 months in 2023, representing a 56 percent rise.

Furthermore, the burden of mortgage payments has intensified. In 2014, such payments consumed about 29.9 percent of family income, but by 2023, that figure had ballooned to 56.6 percent. The report underscores that by 2023, no major Canadian city offered homes on the market that were affordable for families earning the local median income without requiring either a significantly large down payment or external financial assistance.

The rental market has also faced challenges. Nationally, the median rent for all types of units increased from 19.8 percent to 23.5 percent of median after-tax income, with nearly every city reporting a decline in rental affordability.

Regional Variations in Affordability

Affordability pressures have varied across the country. Cities such as Vancouver and Toronto have consistently ranked as the least affordable markets from 2014 through 2023. In contrast, regions in Quebec, the Prairies, and Atlantic Canada generally fared better, although most still saw declines in housing affordability.

Notably, Edmonton, along with Regina, Saskatoon, and St. John’s, was one of the few cities where the number of months of income required for a 20 percent down payment actually decreased. This improvement is attributed to a more favorable ratio of benchmark home prices to local median incomes.

Despite this positive aspect, like other cities, Edmonton has experienced an increase in the proportion of income devoted to mortgage payments, primarily due to rising interest rates. The challenges facing potential homeowners are clear, as the landscape of housing affordability continues to shift dramatically across Canada.

For those interested in a deeper dive into the findings, the full report is available on the Fraser Institute’s website.