Edmonton leads major cities for housing affordability

Edmonton’s housing market is once again showing that it’s among the most affordable in Canada, with a new study illustrating that affordability in more ways than one. The report from Ratesdotca compared median income with the income needed to qualify for a mortgage for the average priced home under the federal stress test, which is two percentage points above the offered rate.

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And Edmonton fared best among six cities, and even the national average, says Victor Tran, mortgage and real estate expert at Ratesdotca.

“Those figures would actually look better today because when we ran those numbers, they were based on a higher mortgage rate.”

The study used a 4.7 per cent rate for a five-year, fixed mortgage with five per cent down on the first $500,000 and 10 per cent on the remainder of the average price — which is the minimum to qualify for mortgage insurance from providers like Canada Mortgage and Housing Corp.

In the study, a buyer in Edmonton would have more than $50,000 excess annual income to qualify for a mortgage. The average price of a home was $397,400, and the household income required for a mortgage was $91,000. But median income in Edmonton was more than $141,600.

Today, rates are below four per cent for five-year fixed mortgages, boosting purchasing power in Edmonton. The lower borrowing cost is likely even more of a relief in the nation’s most expensive cities, Tran says.

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“A lot of younger people — even folks in their 30s and 40s — have given up,” he says about markets like Toronto.

There, the average price at the end of 2024 was about $1.06 million, requiring an income of $232,000 to qualify. That’s more than $95,000 higher than median income.

Affordability is “driving most of the buyers who are moving here from other provinces, largely Ontario,” says John Carter, broker/owner of Re/Max River City in Edmonton.

The current challenge in Edmonton is low inventory, he adds, particularly in single-family homes.

“Most buyers want the same type of property and price point, largely single-family (home) under $500,000, so anything ‘good’ is in multiple offers within the first few days on market.”

And prices are rising in Edmonton. The average price is higher today than at the end of 2024, reaching about $450,000 by the end of February, up more than 10 per cent year over year.

What’s more, single-family detached homes have an average price of about $597,000, up nearly 12 per cent in February.

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Still, Edmonton offers plenty of choice in more affordable segments. Notably, condominium apartments had an average price of about $218,000 at the end of February, albeit up 20 per cent year over year. The Ratesdotca study also examined affordability for condominiums where for Edmonton the average price was about $198,000 with median income exceeding required qualification income by more than $98,000.

In larger cities, apartment condos are also more affordable. In Toronto, the average price in the study was about $662,000. That’s compared with nearly $1.3 million for a single-family home. Even still, qualifying income for a mortgage for a condo exceeded median income by more than $21,000.

What’s more, prices have been falling in Toronto’s condo market. In turn, Trans says buyers there face a dilemma: buy amid falling prices, only to see them fall further, or wait longer for interest rates and prices to fall even more, but risk prices taking off instead.

“We talked about FOMO a few years ago, but now it’s more about the fear of overpaying.”

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