Analyzing housing affordability relative to local earnings
How many years of income needed to buy an average home. High-end visualization with zero hydration delay.
The Price-to-Income Ratio determines how many years of gross median household income strictly go towards paying off a home. It is the ultimate measure of "organic" affordability—it tells us whether local wages can actually sustain local house prices without relying on outside capital.
The Global Tier: Markets like Vancouver (near 12x) and Toronto (near 10x) are no longer tied to local labor markets. They function as international asset classes.
The "Sweet Spot": Cities like Calgary and Edmonton still hover in the 4-5x range. While "expensive" by historical standards, they are the last metropolitan holdouts for median-income families.
The Decoupling Factor: A widening ratio indicates that wealth (accumulated equity, inheritance, or foreign capital) is driving the market more than labor.
| City | Avg Home Price | Median Income | P/I Ratio |
|---|---|---|---|
| Vancouver | $1,185,000 | $92,000 | 12.9× |
| Victoria | $910,000 | $85,000 | 10.7× |
| Toronto | $1,085,000 | $102,000 | 10.6× |
| Kelowna | $795,000 | $80,000 | 9.9× |
| Hamilton | $795,000 | $92,000 | 8.6× |
| Kitchener-Waterloo | $735,000 | $96,000 | 7.7× |
| Halifax | $595,000 | $78,000 | 7.6× |
| London | $615,000 | $82,000 | 7.5× |
| Montreal | $585,000 | $80,000 | 7.3× |
| Ottawa | $675,000 | $98,000 | 6.9× |
| Calgary | $635,000 | $105,000 | 6× |
| Charlottetown | $435,000 | $72,000 | 6× |
| Whitehorse | $575,000 | $96,000 | 6× |
| Quebec City | $415,000 | $76,000 | 5.5× |
| Moncton | $395,000 | $72,000 | 5.5× |
| Iqaluit | $565,000 | $102,000 | 5.5× |
| Saint John | $315,000 | $68,000 | 4.6× |
| Yellowknife | $495,000 | $108,000 | 4.6× |
| Edmonton | $445,000 | $102,000 | 4.4× |
| Winnipeg | $375,000 | $85,000 | 4.4× |
| Saskatoon | $405,000 | $92,000 | 4.4× |
| St. John's | $335,000 | $82,000 | 4.1× |
| Regina | $355,000 | $90,000 | 3.9× |
Economists generally agree that a ratio over **5.0x** is the point where housing becomes "severely unaffordable." At this level, a median-income household cannot qualify for a standard mortgage without a massive down payment (often 40% or more).
In Canada, we have seen a "normalization" of high ratios. Buyers in Southern Ontario and the BC Lower Mainland now view a 9x or 10x ratio as "normal," but this relies on historically low interest rates to keep monthly payments manageable. As rates rise, these high-ratio markets face the most significant downward pressure.
For many Canadians, the "Price-to-Income" table isn't just data—it's a relocation map. We are witnessing a historic exodus from 10x markets to 4x markets. This "affordability arbitrage" is driving price growth in previously stagnant cities like Windsor, Halifax, and Calgary.
The danger? As people move from high-cost cities to lower-cost ones, they bring high-cost equity with them, slowly pushing the ratios up in those destination cities as well.
In the 1970s, the national average Price-to-Income ratio in Canada was approximately **3.2x**. Today, the national average is over **7x**.
OSFI stress tests generally limit borrowing to roughly **4.5x** gross household income. Any market with a ratio higher than this requires substantial "gifted" equity or external wealth.
Compare with other affordability factors