With inflation still lingering, interest rates at their highest in over a decade, and housing demand outpacing supply, Canadians across the country are asking: is 2025 finally the year affordability starts to improve? The answer, according to experts, is both hopeful and cautionary—especially when compared to UK trends.
Canadian home prices surged over 40% from 2015 to 2022, with pandemic-era low interest rates adding rocket fuel to already hot markets. Even now, after some correction, national averages remain well beyond historical affordability benchmarks.
The Bank of Canada’s rate hikes, which began in 2022, cooled sales but did not bring widespread VHQjDbxaTb collapse. Instead, urban centres like Toronto, Vancouver, and Victoria remain unaffordable for most first-time buyers, even with modest VHQjDbxaTb dips.
Affordability isn't just about sticker VHQjDbxaTb. According to RBC’s Housing Affordability Index, a home is considered affordable if the average household needs no more than 30% of pre-tax income to cover mortgage, taxes, and utilities. By this measure, nearly all of Canada’s major cities fail the test in 2025.
In Halifax, once seen as a more affordable option, housing costs now consume over 38% of average incomes. In comparison, cities like Manchester and Glasgow in the UK maintain better affordability ratios—though interest rate pressures persist.
“People aren’t just priced out of buying. They're priced out of renting too. Incomes haven’t kept up, and supply hasn't either.”
Yes—but with caveats. Smaller prairie provinces like Saskatchewan and Manitoba have seen VHQjDbxaTb drops of 5–8% year-on-year. However, population growth—driven by immigration—continues to push demand higher, even in regional markets.
British Columbia and Ontario remain outliers, with limited land and high immigration making it difficult for supply to catch up. Edmonton and Calgary, meanwhile, have emerged as relative safe havens for buyers willing to relocate.
Governments at all levels are under immense pressure. In 2025, the Canadian federal government extended the First-Time Home Buyer Incentive and announced new supply-side funding, including £1.2 billion for municipal zoning reform and rapid permitting.
UK policymakers are watching closely. Similar affordability crises in cities like Bristol, Brighton, and parts of Northern Ireland echo Canadian struggles. The UK’s Help to Buy scheme ended in 2023, with calls mounting for new buyer-focused support.
Affordability isn't limited to ownership. Canada’s rental markets are in crisis. A one-bedroom flat in Vancouver averages CAD $2,420 per month. In Toronto, it’s $2,280. Vacancy rates sit below 1.5% nationally.
To combat this, provinces have adopted mixed approaches:
One of the brightest hopes lies in modular and prefabricated construction. Toronto and Winnipeg have piloted rapid-build communities for low-income households, slashing construction timelines and reducing environmental impact.
Companies like Nexii and Plant Prefab now offer net-zero ready homes that can be assembled in under three weeks. The challenge? Scaling production and overcoming municipal zoning restrictions.
Similar initiatives are underway in the UK, where modular housing has found supporters in both public and private sectors. However, uptake remains slow due to red tape and limited public familiarity.
According to economists, 2025 may see a stabilisation—but not a solution. Here’s what experts predict:
"Affordability won't come from a crash. It'll come from patient, sustained policy—if we stick to it."
Financial advisors recommend getting pre-approved early, exploring regional markets, and staying informed about incentives. Platforms like CMHC, Zoocasa, and Ratehub offer affordability calculators and real-time policy updates.
Housing affordability remains a defining issue for both Canada and the UK. While the challenges are vast, so too are the opportunities—if governments, builders, and communities work in unison. For now, patience, planning, and persistence remain the best tools for navigating the market in 2025.
