House price to income ratio index in Canada 2012-2023, per quarter
The house price ratio in Canada peaked in the second quarter of 2022, followed by three quarters of decline and a slight rebound in 2023. The ratio measures the development of housing affordability and is calculated by dividing nominal house price by nominal disposable income per head, with 2015 set as a base year when the index amounted to 100. Canada's index score in the fourth quarter of 2023 amounted to 139, which means that house price growth has outpaced income growth by almost 40 percent since 2015.
Canadian home prices are falling
After several years of steady increase, Canadian house prices were forecast to fall slightly in 2023. This was also the case in British Columbia, which has consistently been the most expensive province for housing. This is likely because Vancouver, Canada's most expensive city, is located there.
Canadian incomes on the rise
Incomes in Canada have steadily risen since 2000 and show no signs of slowing down in the near future. This should improve housing affordability, as long as home price growth slows down.
