Canada's housing affordability gap narrowed from 80% in September 2023 to 34% in August 2025 due to lower borrowing costs, stronger wages, and cooler home prices. Affordability varies widely by city, with Halifax having the largest gap and Edmonton the smallest. While mortgage debt service ratios improved nationally, expensive markets like Toronto and Vancouver remain financially vulnerable. Increasing homebuilding and stabilizing prices are key to long-term affordability.
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