The dream of homeownership is slipping further out of reach for young families across Canada, as the gap between income growth and rising home prices continues to widen, according to a latest report from the University of Ottawa’s Missing Middle Initiative (MMI). The report, released Tuesday, found that the price-to-median income ratio for starter homes now exceeds levels seen in Vancouver – historically Canada’s most expensive city – in 2004, in eight other Canadian metropolitan areas.
While average dual incomes for households aged 25 to 34 have increased by 76 per cent since 2004, the average price of a newly-built starter home across 23 metropolitan areas has surged by 265 per cent, the MMI report states. This disparity suggests that current income levels are failing to keep pace with the escalating cost of entering the housing market.
The MMI, launched in January 2025 as a spin-off from the University of Ottawa’s Smart Prosperity Institute, focuses on the challenges facing young urban Canadians and the barriers to middle-class entry, according to its website. The initiative, led by Founding Director Mike Moffatt, previously co-authored influential housing reports like the National Housing Accord and the Blueprint for More and Better Housing while at the Smart Prosperity Institute.
The report highlights a stark contrast between affordability in 2004, and today. In 2004, the median dual-earner income in most Canadian cities ranged from $50,000 to $70,000, with starter homes priced at four times that income or less, with the exception of Vancouver, Victoria, and Toronto. For example, in Kingston, Ontario, a starter home cost around $185,000, approximately 3.1 times the median dual-earner income of $59,200. In Vancouver, the price was $365,000, or 6.8 times the median income of $53,500.
Prompt forward to 2025, and the situation has dramatically shifted. In Kingston, a starter home now costs around $740,000, roughly 6.9 times the city’s 2025 median dual-earner income of $107,480. Sherbrooke, Quebec, has seen a similar trend, with starter home prices rising from around $100,000 in 2004 (1.8 times the median income) to $369,000 today (3.3 times the median income of $111,500). Vancouver’s affordability crisis has deepened, with starter homes now costing around $1.7 million, or 17.2 times the median dual-earner income of $98,823.
The MMI report emphasizes that this imbalance isn’t a recent phenomenon triggered by the pandemic. In London, Ontario, the price-to-income ratio more than doubled between 2004 and 2019, indicating a long-term trend of increasing housing unaffordability.
According to a report by the University of Ottawa’s Missing Middle Initiative, released in December 2025, the largest provinces in Canada are performing the worst when it comes to housing policies and outcomes. The assessment graded each province across 36 indicators related to housing.
The report suggests that simply waiting for incomes to catch up to housing prices is not a viable solution. If the cost of building new homes remained constant, the MMI estimates it would take approximately 25 years for incomes to reach levels comparable to those of 2004. The report implies that addressing the affordability crisis requires a focus on reducing the cost of building new homes, rather than relying on price corrections. Without changes to land-use regulations, development charges, and construction standards, the gap between wages and new-home prices is likely to persist.
