Encouraging News on Affordability
As I’m sure you can imagine, each month I read a lot about the housing market. One report that really stood out in June was RBC’s latest housing affordability bulletin. It brought a welcome dose of good news: owning a home in Canada is now the most affordable it’s been in three years. In other words, we’re seeing real progress in easing the cost of home ownership.
According to RBC, affordability improved in nearly every market across Canada. Their measure for the median share of household income needed to carry a typical home dropped to 55.1% in Q1 2025, down from 60.7% a year earlier. That’s the best evaluation since early 2022. The reasons are straightforward: recent rate cuts, softer prices, and steady income growth.
Of course, it’s all relative. Home ownership remains a challenge for many, but these gains show how we’re slowly unwinding the squeeze that’s been a byproduct of the pandemic price boom and rising interest rates.
Condos Leading the Recovery
One detail worth highlighting is how condos are leading this affordability rebound. RBC notes that in cities like Toronto, condo affordability is now back to where it was pre-pandemic — a rare bright spot for first-time buyers and downsizers alike.
In our city, this is especially important. Toronto’s detached homes are still well above pre-2020 price levels and remain a stretch for the average buyer. Condos, however, have seen more price moderation and represent a realistic entry point. For buyers looking to break into the market — young professionals, downsizers, newcomers — condos continue to offer the most attainable path to ownership, with prices that often echo 2019 levels.
More Choice, Softer Prices
Backing this up is what we’re seeing day to day. According to TRREB’s latest numbers, the supply of homes is way up — active listings in June rose 30.8% year-over-year to 30,603, representing over five months of inventory. In the condo sector, months of inventory now sits at 6.95.
Meanwhile, sales were down around 2.4% from last year. Together, these show how buyers have more choice and more negotiating room than in years past. Case in point, the average selling price for all home types in the GTA was about $1.1 million in June, roughly 5.4% lower than last year.
Outside Factors: Confidence Boost
Beyond local trends, one more reason for cautious optimism is Ottawa’s recent decision to pause the planned digital services tax, helping to keep trade talks with the U.S. on track. While not housing policy per se, less trade tension is good for the economy overall…and a more confident buyer is more likely to make big decisions like purchasing a home.
Reality Check
According to the RBC report, Toronto remains one of Canada’s least affordable major markets. But the fact that affordability is trending in the right direction — especially for condos — is a positive sign. Today, condos outnumber detached homes in Toronto, with more supply still coming. This segment of the market can’t be ignored, and I’m confident it’s trending in the right direction, favouring motivated buyers willing to act.
RBC expects this gradual recovery to continue through 2025, helped by stable prices and lower borrowing costs. If that plays out, we could see about half of the affordability lost during the pandemic regained by year-end. That’s real progress.
Final Thoughts
If you’ve been waiting for a better entry point, this could be it — especially if you’re looking at condos. More inventory, softer pricing, and the return of pre-pandemic affordability levels in the condo market are worth paying attention to. For sellers, sharp pricing and solid marketing remain the difference-makers in today’s more balanced environment.
We’ll keep an eye on these trends in the months ahead. For now, it’s good to be able to share some encouraging news: housing affordability is improving, condos are accessible again, and Toronto buyers have options they haven’t seen in years.
If you’d like to talk about what this means for you — whether you’re ready to make a move or just want to better understand your options — my team and I are always here to help.