Navigate Canada's housing crisis with smart city choices for newcomers
On This Page You Will Find:
- Which 3 Canadian cities made the "least affordable" top 10 list
- Shocking home price increases that will impact your budget
- Where 53% of newcomers choose to live (and why that's a problem)
- Alternative affordable cities that offer better opportunities
- Smart strategies to maximize your housing budget as a new immigrant
Summary:
The Globe & Mail's latest affordability report delivers a wake-up call for Canadian newcomers: Vancouver, Toronto, and Montreal now rank among North America's least affordable cities. With Vancouver homes averaging $1.2 million and Toronto at $981K, these popular immigrant destinations are pricing out families. Meanwhile, over 53% of new arrivals still flock to these expensive metros, creating a perfect storm of high demand and limited supply. This comprehensive guide reveals the hidden costs of choosing major cities, explores emerging affordable alternatives, and provides actionable strategies to help you make smarter housing decisions that won't derail your Canadian dream.
🔑 Key Takeaways:
- Vancouver ($1.2M), Toronto ($981K), and Montreal ($578K) rank among North America's 10 least affordable cities
- Over 53% of newcomers still choose these expensive metros despite rising costs
- Home prices increased 46% in Vancouver over 10 years, with Montreal jumping 8% in just one year
- Temporary residents (students/workers) now represent 5-7% of these cities' populations, driving demand
- Smaller Canadian cities offer significantly better affordability without sacrificing quality of life
Maria Rodriguez stared at the rental listings on her laptop screen, her heart sinking with each click. After landing her Canadian permanent residence, she'd assumed Toronto would be the perfect landing spot. The reality? A modest two-bedroom apartment was consuming 60% of her household income, leaving little room for the comfortable life she'd envisioned.
Maria's story isn't unique. The Globe & Mail's recent affordability analysis reveals a sobering truth: three Canadian cities now rank among North America's most unaffordable housing markets, yet newcomers continue flocking to these expensive metros in record numbers.
The Affordability Crisis Hitting Newcomers Hard
The numbers don't lie. Vancouver, Toronto, and Montreal have claimed spots in the top 10 least affordable cities across Canada and the United States. Here's how they stack up against major American markets:
North America's Least Affordable Cities:
- Vancouver
- Los Angeles
- Toronto
- San Diego
- San Francisco
- New York
- Montreal
- Seattle
- Inland Empire
- Boston
This ranking considers multiple factors including home prices, household income levels, and population density. What makes this particularly challenging for newcomers is that these three cities represent the primary destinations for over half of all new Canadian immigrants.
The Perfect Storm: Rising Prices Meet Growing Demand
The housing crisis in these major metros stems from a devastating combination of skyrocketing prices and explosive population growth. In Vancouver, benchmark home prices have surged 46% over the past decade, reaching an eye-watering $1.2 million average. That means a typical family needs to earn well over $200,000 annually just to qualify for a mortgage.
Montreal presents an even more alarming trend. Between July 2024 and July 2025 alone, benchmark home prices jumped more than 8%. At $577,700 average, Montreal might seem "affordable" compared to Vancouver and Toronto, but when matched against the median household income of $80,000, it becomes clear why families are struggling.
Toronto sits in the middle at $981,000 average home price, but with a metropolitan population of 7.1 million people, competition for housing remains fierce. The Canada Mortgage and Housing Corporation predicts these price increases will continue, making homeownership increasingly elusive for newcomers.
Where Newcomers Actually Choose to Live
Despite these affordability challenges, newcomers continue gravitating toward these expensive metros. The 2021 census reveals that 53% of new arrivals settled in Vancouver, Toronto, and Montreal. Here's the breakdown of population composition:
Toronto (2021):
- Foreign-born immigrants: 46.6%
- Canadian-born: 48.2%
- Temporary residents: 5.3%
Vancouver (2021):
- Foreign-born immigrants: 42.2%
- Canadian-born: 51.2%
- Temporary residents: 6.6%
Montreal (2021):
- Foreign-born immigrants: 33.4%
- Canadian-born: 59%
- Temporary residents: 7.5%
The most significant change between 2016 and 2021 was the dramatic increase in temporary residents—international students and workers—who now represent 5-7% of these cities' populations. This surge in temporary residents adds additional pressure to already strained housing markets.
Montreal experienced the largest jump in permanent resident immigration during this period, which partly explains why it joined Vancouver and Toronto in the affordability crisis. What once served as a more affordable alternative to Toronto and Vancouver has now become increasingly expensive.
The Hidden Costs of Choosing Major Cities
Beyond sticker price, living in these major metros carries hidden costs that can devastate newcomer budgets. Transportation expenses are higher due to longer commutes as affordable housing gets pushed to city outskirts. Childcare costs can exceed $1,500 monthly per child in Toronto and Vancouver. Even groceries and utilities carry premium pricing in these dense urban markets.
Many newcomers also underestimate the competition factor. In hot markets like Vancouver and Toronto, rental applications often require first and last month's rent upfront, plus additional deposits. Bidding wars are common, with successful applicants offering above asking price or additional months' rent in advance.
Government Response and Future Outlook
Recognizing these pressures, the Canadian government has implemented several measures aimed at cooling demand. Recent policies have capped temporary resident admissions, particularly international student permits. The government has also reduced permanent resident admission targets over the next three years, hoping to provide breathing room for housing construction to catch up with demand.
However, these policy changes may take years to meaningfully impact housing costs in major metros. For newcomers arriving in the next 12-24 months, exploring alternative destinations becomes increasingly important for financial stability.
Smart Alternatives for Savvy Newcomers
The good news? Canada offers numerous cities and towns that provide excellent quality of life without the crushing housing costs. Cities like Halifax, Winnipeg, Calgary, and Quebec City offer strong job markets, cultural amenities, and established immigrant communities while maintaining significantly better affordability ratios.
Consider Halifax, where average home prices sit around $400,000—less than half of Toronto's average. Calgary offers a diverse economy, no provincial sales tax, and average home prices under $500,000. These alternatives don't require sacrificing career opportunities or community connections.
When evaluating alternatives, consider factors beyond housing costs: job market strength in your field, climate preferences, language requirements, and proximity to family or cultural communities. Many smaller cities actively recruit skilled immigrants through Provincial Nominee Programs, offering additional pathways to permanent residence.
Making the Right Choice for Your Family
Choosing where to establish your Canadian life represents one of your most important decisions as a newcomer. While Toronto, Vancouver, and Montreal offer undeniable advantages—diverse communities, job opportunities, cultural amenities—the financial stress of unaffordable housing can undermine your overall success and happiness.
Before committing to these expensive metros, honestly assess your financial situation and long-term goals. Can you comfortably afford housing costs that consume 30-35% of your income? Do you have sufficient emergency savings to handle unexpected expenses? Are there career opportunities in more affordable markets that align with your skills?
Remember, your initial Canadian destination doesn't have to be permanent. Many successful immigrants start in smaller, affordable communities to establish financial stability, then relocate to major metros once their careers and savings have grown.
The key is making an informed decision based on realistic financial planning rather than assumptions about where you "should" live as a newcomer. Your Canadian dream shouldn't be derailed by unsustainable housing costs in the first few years.
FAQ
Q: Why are Vancouver, Toronto, and Montreal specifically problematic for newcomers in 2025?
These three cities have made North America's top 10 least affordable housing markets, with Vancouver averaging $1.2 million for homes, Toronto at $981,000, and Montreal at $577,700. What makes this particularly challenging is that 53% of newcomers still choose these metros despite the costs. Vancouver has seen 46% price increases over 10 years, while Montreal jumped 8% in just one year. The combination of high prices and massive newcomer demand creates a perfect storm where families need household incomes exceeding $200,000 just to qualify for mortgages in Vancouver, far beyond what most new immigrants earn initially.
Q: What hidden costs beyond home prices should newcomers expect in these expensive cities?
Beyond sticker prices, these metros carry significant hidden expenses that can devastate newcomer budgets. Transportation costs are higher due to longer commutes as affordable housing gets pushed to outskirts. Childcare exceeds $1,500 monthly per child in Toronto and Vancouver. Rental applications require first and last month's rent upfront, plus additional deposits. Bidding wars are common, with successful applicants offering above asking price. Groceries and utilities carry premium pricing in dense urban markets. Many newcomers underestimate these cumulative costs, which can add $1,000-2,000 monthly to living expenses compared to smaller Canadian cities.
Q: How is the temporary resident population affecting housing demand in these cities?
Temporary residents (international students and workers) now represent 5-7% of Vancouver, Toronto, and Montreal's populations—a dramatic increase from 2016 to 2021. In Montreal, temporary residents make up 7.5% of the population, Vancouver 6.6%, and Toronto 5.3%. This surge adds significant pressure to already strained rental markets, as temporary residents compete with newcomers and locals for the same housing stock. The government has responded by capping temporary resident admissions and reducing international student permits, but these policy changes may take years to meaningfully impact current housing costs.
Q: What are the best affordable alternatives to these expensive metros for newcomers?
Halifax offers average home prices around $400,000—less than half of Toronto's average—with a growing tech sector and established immigrant communities. Calgary provides a diverse economy, no provincial sales tax, and homes under $500,000 average. Winnipeg offers extremely affordable housing with a strong manufacturing base. Quebec City combines affordability with rich culture and government job opportunities. These cities maintain excellent quality of life, job markets, and immigrant support services without crushing housing costs. Many also offer Provincial Nominee Programs that provide additional pathways to permanent residence while building careers in more sustainable markets.
Q: How can newcomers determine if they can actually afford housing in these expensive cities?
Use the 30-35% rule: housing costs shouldn't exceed one-third of household income. For Vancouver's $1.2 million average, you'd need $200,000+ annual income just for mortgage qualification. Calculate total monthly costs including mortgage/rent, utilities, transportation, childcare, and emergency savings. Factor in hidden costs like higher insurance, property taxes, and competitive rental markets requiring extra deposits. Honestly assess your current income, job prospects, and savings. Consider that many successful immigrants start in affordable communities to build financial stability, then relocate to major metros once established. Your initial destination doesn't have to be permanent.
Q: What government policies are being implemented to address this housing crisis?
The Canadian government has capped temporary resident admissions to reduce housing demand pressure, particularly targeting international student permits which surged in recent years. Permanent resident admission targets have been reduced over the next three years to allow housing construction to catch up with demand. However, these policy changes will take 2-3 years to meaningfully impact housing costs in major metros. For newcomers arriving in 2024-2025, exploring alternative destinations remains crucial for financial stability. The government is also working with provinces to accelerate housing construction, but supply increases will take time to materialize in expensive markets.
