🍁Canada’s Housing Market Has Split Since the 2022 Peak

🚨The chart tells a very important story.

Since the 2022 housing peak, Canada has not experienced one national housing correction. It has experienced a regional fracture.

Some provinces are finally seeing affordability improve.

Most are not.

And that distinction matters enormously.

The chart measures the change in the home price-to-income ratio by province since the 2022 peak. In plain English, this ratio asks:

How many years of income does it take to buy the average home?

When the ratio falls, affordability improves.

When the ratio rises, affordability worsens.

And since 2022, only two provinces have meaningfully improved:

Ontario and British Columbia.

That should immediately tell us something.

These were the two most inflated, most leveraged, most credit-sensitive housing markets in the country. They were also the markets where prices had moved furthest away from local income reality.

Ontario’s price-to-income ratio fell from 11.2x to 9.0x, a decline of almost 20%.

British Columbia’s ratio fell from 12.3x to 10.8x, an improvement of roughly 12%.

That is significant.

But let’s be clear: this does not mean Ontario and BC are affordable again.

They are not.

A home price-to-income ratio of 9x or 10.8x is still historically extreme. But it does mean the pressure from the 2022 rate shock has started to force the most overextended markets back toward reality.

The bubble has cracked first where the bubble was largest.

That is exactly what you would expect when the credit cycle turns.

The Rate Hikes Did Not Fix Canadian Housing

The more important message is what happened outside Ontario and BC.