The Canada Mortgage and Housing Corporation (CMHC) has officially revised its long-standing housing affordability benchmark, quietly marking the end of any policy ambition to return to the affordability levels of 2004.
According to its new report, CMHC will now use 2019 as the baseline year for housing affordability going forward. The change is more than symbolic — it represents a significant shift in how policymakers define what “affordable housing” means for Canadians.
Why the Shift Matters
Until now, CMHC had set 2004 as the target year for affordability because housing costs at the time were more proportional to average incomes. In its view, 2004 represented a time when middle-income families had a fair shot at homeownership without stretching beyond their means.
But with housing costs surging dramatically in the post-pandemic years — driven by low interest rates, supply constraints, and demographic shifts — the goal of returning to 2004 affordability levels has become, in CMHC’s own words, “no longer realistic.”
So, they’re recalibrating. From now on, CMHC will aim to bring affordability back to 2019 levels — just before the pandemic boom sent prices to historic highs.
The New Numbers: What It Will Take
The updated report estimates that Canada must double its current pace of homebuilding — reaching 430,000 to 480,000 new housing units annually — to bring affordability back to 2019 levels by 2035. For reference, this is nearly twice the number of homes currently being built each year.
CMHC has also provided housing gap estimates at the city level:
Toronto needs a 70% increase in homebuilding to meet future ownership demand.
Vancouver would require 7,200 additional units per year, about a 29% increase from current levels.
Calgary, despite strong construction activity, still falls short by 45%.
Ottawa-Gatineau has the second-largest supply gap among Canadian cities.
Edmonton is the only major market projected to meet future demand without additional building, though affordability challenges remain for vulnerable populations.
On the provincial front, Ontario, Nova Scotia, and British Columbia face the largest shortfalls relative to projected housing needs.
Is 2019 Actually Affordable?
Shifting the benchmark to 2019 may be more politically and practically feasible, but that doesn’t mean it’s especially comforting for prospective buyers. According to RBC’s Affordability Index, the ownership cost of a detached home in 2019 consumed 46% of median household income — a figure still well above traditional affordability thresholds (typically around 30-32%).
By contrast, at the post-pandemic peak, this figure soared to 63.8%, and even today sits above 55% in many regions. Simply put, we’re still a long way off — and returning to 2019 levels will likely require one of three things:
A substantial drop in home prices (by $80,000–$140,000 according to some independent calculations),
Significant wage growth,
Or lower interest rates — possibly all three.
Political and Financial Realities
CMHC is careful to frame these targets as aspirational yet achievable — but they stop short of laying out a roadmap that would realistically deliver this scale of affordability improvement. That’s not entirely surprising. The politics of large price corrections are tricky. Falling home values may help new buyers, but they would also shrink the equity of existing homeowners, damage balance sheets, and potentially unsettle the broader financial system.
Governments of any stripe would be reluctant to trigger a reset of that magnitude.
Final Thoughts
While CMHC’s revised benchmark is more grounded in recent reality, it’s still a heavy lift. Canada would need sustained and systemic reform — everything from zoning to labour supply to construction innovation — to double homebuilding over the next decade.
And yet, even if we get there, we’ll still be trying to return to a market where the average family was already spending nearly half its income on housing. That alone says a lot about where we’re starting from.
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