This article supplied by Troy Media.

By Lee Harding

Canada’s housing affordability crisis is no mystery. It’s the result of deliberate planning decisions that limit suburban growth and inflate home prices

If it feels like housing is getting more unaffordable, it’s because it is.

The Frontier Centre for Public Policy and Chapman University’s Center for Demographics and Policy have released the 2025 edition of the Demographia International Housing Affordability report, authored by Wendell Cox. It confirms what many homebuyers already suspect: affordability is in decline.

The report examines 95 major housing markets across eight countries, using data from the third quarter of 2024. Now in its 21st year, the study reveals a troubling trend: affordability continues to erode, especially in jurisdictions with strict land-use regulations.

Generally, the cost of living is highest where municipal governments impose the greatest restrictions on suburban growth. These “urban containment
strategies”—including greenbelts, zoning rules and growth boundaries—are often introduced to curb urban sprawl and promote sustainability. But by limiting the land available for development, they drive up the cost of land and, by extension, housing.

The effects are especially stark in places like the United Kingdom, California, Washington, Oregon, Colorado, New Zealand, Australia and much of Canada—jurisdictions where these growth-limiting policies dominate urban planning.

Joel Kotkin, director of the Chapman University centre and a long-time California resident, calls the consequences “feudalizing.” In the feudal system, peasants owed their fortunes, including housing, to the graces of their overlords.

“[T]he primary victims are young people, minorities and immigrants,” Kotkin writes in the report. “Restrictive housing policies may be packaged as
progressive, but in social terms their impact could better be characterized as regressive.”

The same pattern applies to Canada. Even after the economic disruption of the COVID-19 lockdowns, housing affordability remained critically strained. In fact, most major Canadian markets saw a slight worsening.

Demographia measures affordability using the “median multiple”—the ratio of median house price to median household income. This ratio shows how many years of income are needed to buy a home, offering a simple comparison across regions. Around 1990, a home typically cost three times the  average income—a ratio still considered affordable. Anything above that lands on a scale of unaffordability, with scores of nine or more deemed “impossibly unaffordable.”

Canada’s national median multiple is 5.4, placing it in the “severely unaffordable” category. That’s worse than the United States at 4.8 (“seriously unaffordable”), and slightly better than the United Kingdom’s 5.6. Canada also trails Ireland at 5.1 and Singapore at 4.2. New Zealand stands at 7.7, Australia at 9.7 and Hong Kong at an extreme 14.4.

Among Canadian cities, only Edmonton, at 3.7, lands in the “moderately unaffordable” range, ranking fifth-best globally. Calgary sits at 4.8, followed by Ottawa-Gatineau (5.0), Montreal (5.8), Toronto (8.4) and Vancouver (11.8), which ranks as the fourth-least affordable city in the world. This marks a sharp change for Toronto, where affordability remained relatively stable with a median multiple below four from 1971 to 2004.

Though designed to increase sustainability, these planning models have significantly reduced land availability and driven home prices out of reach for
many. As urbanist Jane Jacobs once said, “If planning helps people, they ought to be better off as a result, not worse off.” The data makes it clear—they aren’t.

Yet despite growing evidence, federal and provincial leaders continue to sidestep the core issue.

“In Canada, policy makers are scrambling to ‘magic wand’ more housing,” writes Frontier Centre president David Leis in the report. “But they continue to mostly ignore the main reason for our dysfunctional, costly housing markets—suburban land use restrictions.”

New planning concepts such as the “15-minute city” may make matters worse. This approach aims to create communities where residents can access work, shops and services within a short walk or bike ride. While appealing in theory, it can further restrict development and intensify affordability pressures.

Another key factor—not addressed in the report—is the role of dual-income households. In competitive markets, housing prices are driven not just by what people earn, but by what they can borrow. As more households rely on two fulltime incomes to qualify for mortgages, the market adjusts accordingly, pushing prices higher. This places added pressure on families, especially as governments expand daycare programs and increase taxes to support them, effectively requiring both parents to work just to keep up.

There is, however, a sliver of optimism. The shift toward remote work may ease pressure in high-cost urban centres as more Canadians choose to live in areas with lower housing costs.

Whether governments address the root causes or not, people are already making choices that reflect affordability realities. Increasingly, the heart of a major city is no longer the preferred destination for middle-class Canadians. For many, housing affordability isn’t just an economic issue: it’s about opportunity, stability and the ability to build a future.

Lee Harding is a research fellow with the Frontier Centre for Public Policy

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country.

MxM News

Quick Hit:

Inflation dropped to its lowest level in over four years in April, marking the third straight month of better-than-expected consumer data. The White House says President Trump’s economic policies are driving a “Golden Age” of falling prices and rising wages for American workers.

Key Details:

• Grocery prices fell by the largest margin in nearly five years, while egg prices plunged 12.7%—the steepest one-month drop since 1984.

• Gas prices fell for a third consecutive month, contributing to broader declines in energy and transportation costs.

• Real wages are up 1.9% year-over-year, with steady growth over the last three months giving workers more buying power.

JUST IN: April’s inflation report came in below expectations for the third straight month.

Grocery prices saw their largest decline in nearly five years.

Gas prices fell for the third month in a row. pic.twitter.com/AgsyV6efkF

— Rapid Response 47 (@RapidResponse47) May 13, 2025

Diving Deeper:

The Consumer Price Index report for April, released Tuesday, shows inflation easing to a four-year low—the strongest evidence yet that President Trump’s economic policies are reversing years of price pressure on American families.

“Inflation has fallen to the lowest level in more than four years as April’s Consumer Price Index smashes expectations for the third straight month in President Donald J. Trump’s Golden Age,” the White House said in a statement.

Prices for essentials saw some of the sharpest declines in years:

• Grocery prices were down 0.4% in April, while egg prices dropped 12.7%, “the most since 1984,” Bloomberg reported.

• Airfare, hotel rates, used vehicles, and energy costs all declined compared to a year ago.

• Workers’ real wages rose for the third straight month, climbing 1.9% over the past year.

Mainstream media outlets that previously warned of Trump’s tariff-driven inflation are now acknowledging the downturn. Fox Business Network’s Maria Bartiromo noted: “Oil is down, eggs are down, food is down. We’re seeing that reflected, so all that hysteria over tariffs is not showing up in these numbers.”

Investopedia’s Caleb Silver added, “The smoke was much worse than the fire… That drop in gasoline and energy prices—a big deal.”

NBC’s Brian Cheung said the report was “pretty solid,” and Bloomberg highlighted that “grocery prices were down 0.4% on the month… validating some of President Donald Trump’s messaging.”

The bottom line: prices are falling, paychecks are going further.