Cost Of Living & Housing Market Trends In Canada – June 2025
Canada’s spending and housing market is in the 2025 crossroads, where economic shifts and regional dynamics are on display. Inflation is continuing to rise from global supply chain disruptions and energy costs, and costs are having a major impact on all households and families. And food pricing has risen dramatically – at a substantial level for items we all buy – which has now seen prices for several staples rise at rates of 7% for dairy and meat, poor gas prices are sitting at $5.20 (while the U.S. average is $3.70) in some locations in Canada are still higher. And not to help – high property taxes, These are $8,000 a year for a family home, and one must also consider financing a purchase – that means budgeting $15,000 for taxes, pre-tax income in anticipation of taxes considered in Canada’s tax structure.
Housing affordability is still a huge problem for cities like Toronto and Vancouver. Prices are now about 11 times the average annual income, which is up from about 6.4 in 2005. This rise is not sustainable. The Greater Toronto Area (The GTA) is experiencing sky high active listings giving power to buyers and leaving sellers in a saturated market. Nevertheless, there are signs of increased affordability through falling prices, rising wage, and lowered interest rates in some areas.
As a result of increased mortgage borrowing, Canada’s household debt-to-GDP ratio is now the highest among major economies and continues to exacerbate the affordability issue faced across Canada. In comparison, smaller cities like Calgary are realizing relative affordability, driven by stability of demand and lower price-to-income ratios. Renting has gained traction in many markets because property taxes and maintenance costs have deterred homeownership for many families.
In the future, policies such as tax reform and increased housing supply could lessen the current pressure on the housing market, but regional urban markets continue to have structural challenges. Canadians are adjusting and prioritizing renting, moving away from major urban cities, and exploring secondary cities, which could radically change the housing landscape in 2025.
