Pgiam via Getty Images A view of condo towers along Queen's Quay in Toronto.

Are Canada’s housing markets even serving their own populations anymore? We are certainly not out of bounds to wonder that, given new research showing only small fractions of families in Canada’s largest cities can afford to buy an average-priced home. The latest housing affordability report from Royal Bank of Canada included estimates that only 12 per cent of Vancouver families could afford an average home at current prices, while Toronto is a little better at 20 per cent. “And this isn’t taking into account the mortgage stress test,” economists Robert Hogue and Craig Wright wrote. Watch: Is Canada’s economy addicted to money laundering? Story continues below.

But while Toronto and Vancouver’s astronomical prices have stolen all the attention, RBC’s research highlights how prices have risen beyond affordability for many people in other cities as well. In Montreal, which is considered almost comically affordable by Torontonians, only 36 per cent of families can afford an average home. Fewer than half can afford one in Calgary, Edmonton and Ottawa.

RBC Economics

If there’s good news here, it’s that things have been moving in the right direction recently. RBC’s affordability measure has declined for two straight quarters, meaning housing is becoming more affordable. “Price declines in the West and parts of Atlantic Canada, as well as rising household income, helped lower the bar to ownership in most markets,” Hogue and Wright wrote. Canada-wide, it now takes 51.4 per cent of an average household income to cover the costs on an average house, down from 53.9 per cent six months earlier.