Toronto condo affordability back to 2019 levels as smaller markets close the gap: RBC

Toronto condo buyers are seeing something they haven’t in years: a cost of living that feels similar to 2019.

A new Royal Bank of Canada report says falling condominium prices have restored affordability in the Greater Toronto Area to roughly pre-pandemic levels, marking one of the clearest signs yet that the city’s prolonged condo correction is reshaping the market. 

At the same time, buyers in several smaller Canadian centres are finding ownership increasingly expensive as prices continue to climb.

The findings come as housing affordability continues to improve across much of the country. RBC’s national affordability measure fell 1.4 percentage points to 53 per cent in the first quarter of 2026 — its best reading in four years. The measure tracks the share of a median household’s pre-tax income required to cover ownership costs, meaning a lower reading signals improved affordability.

Toronto condos lead the recovery

The gains were led by Toronto and Vancouver, where softer home prices have eased some of the pressure on buyers. Even so, RBC said both remain Canada’s least affordable housing markets overall, and the recent improvement has only partially reversed the sharp deterioration that occurred during the pandemic.

The biggest turnaround has come in Toronto’s condo market.

RBC’s affordability measure for Toronto condominiums fell to 35.2 per cent in the first quarter, roughly in line with late-2019 levels after peaking during the pandemic housing boom.

“The price correction, alongside steadily rising incomes, has helped roll back the pandemic-era affordability deterioration entirely,” RBC assistant chief economist Robert Hogue wrote. 

The bank’s affordability measure estimates the share of a representative household’s pre-tax income needed to cover ownership costs, including mortgage payments, property taxes and utilities. 

Detached homes still out of reach

RBC said ownership costs for a typical detached home in Toronto still consume more than 80 per cent of a representative household’s income, leaving the region second only to Vancouver as Canada’s least affordable major market.

The gap underscores how uneven the affordability improvement has been. Condo buyers in Toronto have benefited from several years of price declines, while many ground-oriented homes remain far beyond the reach of median-income households.

Nationally, condo affordability has almost returned to pre-pandemic levels, driven largely by price corrections in Toronto and Vancouver.

RBC’s national condo affordability measure improved to 35.2 per cent in the first quarter, leaving it less than one percentage point above where it stood before the pandemic.

Smaller markets are catching up

Toronto’s condo correction has also reshaped Canada’s affordability rankings.

For the first time in 16 years, RBC said Montreal’s condo affordability index has crested above Toronto’s, reflecting how sharply prices have corrected in the GTA while Montreal has continued to become less affordable.

Halifax is also closing the gap. The report found the city’s condo affordability measure now sits less than three percentage points behind Toronto’s — the closest Halifax has come to Canada’s second-most expensive housing market in more than a decade.

The trend highlights a broader shift across the country. While affordability has improved in Toronto and Vancouver, it continued to deteriorate in several smaller markets, including Montreal, Quebec City, Winnipeg and St. John’s, where home prices have remained comparatively resilient.

Gains likely to slow

RBC expects affordability to continue improving, but at a much slower pace.

“Further easing in affordability could get slimmer as price declines taper off, and interest rates have likely passed cyclical lows, limiting reductions in mortgage costs,” the report said.

The bank expects home prices to remain generally stable over the next two years, meaning future affordability gains are likely to depend more on income growth than further declines in housing costs.

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