Housing affordability in Canada has hit a breaking point, and if you’ve been wondering why finding a decent place to live feels impossible these days, newly released government documents paint a pretty grim picture of what’s really going on behind the scenes.
The internal briefing materials prepared for Housing Minister Gregor Robertson don’t sugarcoat the situation – they straight-up admit that Canada’s housing crisis is hurting the economy and making it nearly impossible for regular people to find places to live.
But that’s just the beginning of what these documents reveal.
The Numbers Don’t Lie
Let’s start with some facts that’ll make your head spin. The average home price in Canada dropped to $693,300 in July 2025 – which sounds like good news until you realize that even with this “decrease,” most Canadians still can’t afford to buy.
Here’s the reality check: if you’re an average Canadian family making $70,500 after taxes (about $5,880 per month), your mortgage payment alone would eat up $2,880 of that – nearly half your entire income. And that’s just the mortgage, not including property taxes, insurance, utilities, or you know, food.
The government documents don’t mince words about who’s getting hit hardest. “Vulnerable populations and lower-income households are struggling to have their basic housing needs met due to a lack of suitable affordable housing,” they state bluntly.
But here’s the kicker – it’s not just low-income families anymore. Middle-class Canadians are also struggling to buy homes and are staying in rental units longer, which is “placing additional pressures on rental supply and increasing rental costs.”
The Rental Market Nightmare
Speaking of rentals, let’s talk about what’s happening there. The average rent in Canada was $2,108 in July 2025, and while that’s actually down 2.2% from last year, it’s still way above what most people can reasonably afford.
Think about it this way: if you’re making minimum wage or even a decent salary, spending over $2,100 a month just on rent leaves very little for everything else. No wonder people are living with roommates well into their 30s or moving back in with their parents.
The housing affordability crisis has created this weird situation where people who would normally buy homes are stuck renting longer, which drives up rental prices for everyone else. It’s like a really depressing domino effect.
Mortgage Rates: The Double-Edged Sword
Now, you might think falling mortgage rates would help with housing affordability, and you’d be partially right. The Bank of Canada has cut rates from 5% in 2024 down to 2.75% by March 2025, and they’ve held steady since then.
Variable mortgage rates are sitting around 4% to 4.5%, while fixed rates are hovering around 4.4%. Compared to where they were a couple years ago, that’s actually not terrible. But here’s the problem – even with lower rates, house prices are still so high that the monthly payments are killing people.
Conservative Leader Pierre Poilievre summed up the situation pretty dramatically, calling it a “triple crisis, with prices too high for buyers to buy, too low for sellers to sell and inadequate for builders to build.” Whether you agree with his politics or not, that’s a pretty accurate description of the mess we’re in.
The Construction Slowdown
Here’s something that’s making housing affordability even worse – we’re not building enough homes. The documents reveal that housing starts are slowing down this year, even though they’re still above the 10-year average.
Toronto is on track for its lowest number of housing starts in three decades. Let that sink in for a moment. In a city where people are fighting over tiny condos, we’re building fewer homes than we have in 30 years.
The government knows this is a problem. They’re planning to launch something called the “Build Canada Homes” agency to try to speed up construction and get builders to use new technologies. But that’s still in the planning stages while people need homes right now.
Why Everything Costs So Much More
The documents reveal that the cost of constructing a residential building in Canada has jumped 58% since 2020. That’s massive, and it helps explain why housing affordability keeps getting worse even when there’s political will to fix things.
Some of this is due to supply chain issues, higher material costs, and labour shortages. But the documents also mention that US tariffs could push construction costs even higher, which would make housing affordability problems even worse.
Population Growth vs. Housing Supply
Here’s one of the biggest factors affecting housing affordability that people don’t always connect: Canada’s population has been growing really fast, but we haven’t been building houses fast enough to keep up.
The documents note that Canada’s rapid population growth has outpaced other G7 nations and is “compounding pressures and costs for communities.” When you have more people competing for the same number of homes, housing affordability goes out the window.
The government is apparently planning to slow down population growth, which might help housing affordability in the long run, but that’s a controversial topic that gets into immigration policy and all sorts of political debates.
Homelessness Numbers Are Scary
The housing affordability crisis isn’t just making it hard for people to buy homes – it’s literally putting people on the streets. The documents show that average nightly homeless shelter use rose 43% between 2020 and 2023.
Even worse, people are staying in shelters longer, which suggests there are serious barriers to getting people housed. When housing affordability is this bad, it’s not just an inconvenience – it’s pushing people into homelessness.
The Rental Investment Problem
Here’s something that might surprise you: the documents mention that 20% to 30% of purpose-built rental units are owned by big institutional investors. This is part of what experts call the “financialization” of Canadian real estate.
When big investment companies buy up rental properties, it can drive up rents and make housing affordability worse for regular renters. It’s one of those things that sounds technical but has a real impact on whether you can afford to live somewhere decent.
What’s Being Done About It
The federal government isn’t just sitting around documenting how bad housing affordability has gotten – they’re trying to do something about it. Prime Minister Mark Carney announced plans for the new Build Canada Homes agency and hinted at major housing announcements.
They’re also working on things like:
- A Housing Design Catalogue with pre-approved construction designs
- Changes to the National Building Code to support more affordable housing
- A Home Buyers’ Bill of Rights and Renters’ Bill of Rights
But experts are divided on whether these measures will actually help housing affordability in any meaningful way.
The Forecast Isn’t Great
Looking ahead, the government documents predict that Canadian home prices will grow faster in 2025 but cool over the next two years. That sounds good for housing affordability, but remember – even “cooling” prices might still be way too high for most people.
Housing starts are expected to slow down this year but remain above the 10-year average. That’s… not terrible, but it’s also not nearly enough to fix housing affordability problems.
The really frustrating part is that experts know what needs to happen. CMHC estimates that Canada needs to build between 430,000 and 480,000 new housing units annually over the next decade to restore housing affordability to 2019 levels. That’s roughly double what we’re building now.
The Bottom Line
Housing affordability in Canada isn’t just a policy problem or a market fluctuation – it’s a crisis that’s affecting millions of people’s daily lives. When government documents are describing the situation as “dire,” you know things are serious.
The challenge is that fixing housing affordability requires action from all levels of government, private builders, and communities working together. It’s not something that can be solved overnight, even with the best intentions and unlimited budgets.
For now, housing affordability remains one of the biggest challenges facing Canadians, especially young people trying to start their adult lives and families looking for stable places to live. Whether the various government initiatives will actually make a difference remains to be seen, but one thing’s for sure – the current situation isn’t sustainable for much longer.
