Banff 
In recent years, families across Canada have been facing an uphill battle to meet their basic living costs due to rising prices for necessities like groceries, housing, and other services. Housing, as a crucial expense, has notably seen significant price increases, adding to the financial strain on many. To understand the impact of these rising costs on the real estate market, Zoocasa conducted an analysis comparing the increase in the cost of living to real estate prices in 15 Canadian cities.
Credit: Zoocasa
Zoocasa used Market Basket Measure (MBM) data from Statistics Canada and benchmark home prices from the Canadian Real Estate Association to study affordability, which revealed that in 13 of the 15 cities studied, home prices had risen more sharply than the cost of living.
The Market Basket Measure is a way Statistics Canada measures poverty by comparing what families earn to the cost of a basic set of goods and services. If a family’s income is less than what’s needed for these essentials, they’re considered to be living in poverty. The MBM varies across different areas in Canada, recognizing that living costs can differ widely depending on where you are. In short, MBM indicates the disposable income needed by a family of four for a basic standard of living,
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Zoocasa found that while MBM has seen increases, it has not kept the pace of home prices. Calgary reported the highest MBM at $55,771, with Quebec CMA at the lower end at $45,411.
Key findings by Zoocasa include:
- Moncton and Halifax saw MBM increases of 18.4% and 18.5%, respectively, over five years, while their home prices surged by over 100% and 82.4%, respectively. This trend underscores the growing challenge many Canadians face in finding affordable housing.
- Larger cities like Toronto and Vancouver, despite having high MBMs, reported less significant home price increases. The high baseline costs in these cities mean that modest increases in home prices do not necessarily translate to improved affordability.
- Smaller markets, notably St. John’s, Regina, and Saskatoon, maintained relative affordability with minor changes in home prices and MBM. Regina, for instance, saw the smallest increase in home prices, making it an example of a market where housing costs have remained relatively stable despite rising living expenses.
- Edmonton presents a unique case where the benchmark home price increased at a slower rate than the MBM, offering a potential opportunity for homebuyers seeking more affordable options.
Credit: Zoocasa
Zoocasa’s analysis underscores a critical issue: while the cost of living continues to rise across Canada, the spike in home prices in most cities far exceeds these increments, exacerbating the challenge of finding affordable housing.
“With home prices rising at a rate much faster than the cost of living, many Canadians are finding it increasingly difficult to find affordable housing options,” said Carrie Lysenko, Chief Executive Officer of Zoocasa.
“We need to see a shift in Canadian property options in order to help bridge the gap between income levels and housing costs.”
Zoocasa’s report underscores the pressing need for strategic interventions in the housing market to ensure Canadians can access affordable housing options.
