Has the family been priced out of big cities?
Despite Canadian cities occupying 20% of the top 10 of the Global Liveability Index, more and more young families are choosing (or having no choice but to) move out of the country’s largest metropolises
June 30, 2025
It’s Sunday morning, and you need a break. The kids have been screaming since 5 a.m. Saturday, your house is a mess and you would do anything for a quiet cup of coffee and a book at the corner table of a local bakery.
“That’s it,” you say. “Get in the car, everyone! We’re going to grandma and grandpa’s.” You pack everything up, load the van and begin the journey to a temporary drop-off sanctuary.
“Are we there yet?” come the impatient little voices from the back seat.
“Just 90 more minutes, kids,” you respond, already exasperated as you come to a stop on the highway in bumper-to-bumper traffic.
You see, you left your big-city parents far, far up the road when you made the decision to give your young family a larger home to grow up in.
“Homes in Canada, and especially big cities like Toronto, Vancouver and Montreal, have become unaffordable for most younger families” says Robert Lavigne, OMERS Chief Economist. “There’s clearly a housing crisis in Canada that has been building over the years.”
The exodus
Higher interest rates and increasingly unaffordable homes mean raising a family in the same areas many grew up in as children themselves is becoming much more difficult. In just the last five-plus years, Toronto’s home prices have risen by 43%. In Vancouver, the living wage (a wage that is high enough to maintain a normal standard of living) rose to $27.05 per hour in 2024, 5.3% higher than 2023. In Montreal, someone working a minimum wage job for 35 hours a week in 2024 only reached 68% of their sustainable income (the ability to balance personal income and expenses to meet current needs and wants while ensuring long-term financial security and stability). And even though the average rent across the country recently reached its lowest level in almost a year and a half, this comes on the heels of years of rapid increases, including 12% in 2022 and another 9% in 2023. Rents are still 17% higher than five years ago.
It should then come as no surprise that the number of Canadians leaving these aforementioned three major cities to move elsewhere within their same province doubled since before the pandemic, as of mid-2024. Young families are among the most likely to leave.
No end in sight
But is having to pack a lunch just to visit relatives going to become the norm? Unfortunately, it’s beginning to look that way.
In 2022, the Ontario Housing Affordability Task Force published a report that showed the tremendous gap between house prices and incomes for Ontarians. The former grew 180% over the previous 10 years, while incomes grew approximately 38%.
Yet there remains hope, according to Robert. “The forces driving the wedge between incomes and housing prices are shifting. While the ultimate direction of affordability remains unclear, at least it is not clearly worsening. On the one hand, immigration inflows are waning, at least temporarily. This should ease the demand for housing at the margin. Interest rates have fallen in Canada, which should improve affordability for new home buyers (although mortgage resets for many Canadians could still prove be a shocker). There are also campaign promises to increase the role of the federal government in boosting the number of homes built.”
On the other hand, Robert believes trade turmoil ahead will likely slow the Canadian economy, putting more pressure on the finances of homeowners. And the regulatory obstacles to increasing the housing stock could prove persistent despite best efforts to remove red tape. In sum, while there may be some improvements ahead, Robert thinks it’s likely best not to count on a dramatic shift in home affordability anytime soon.
So while it’s not ideal, it increasingly looks as if big cities will serve as places for families to work and visit, rather than set up a life. Let’s just hope that the van can charge the kids’ tablets while they watch their favourite movie from start to finish.
The Relatable Economist is an ongoing written series focused on how the economy, geopolitics, markets and more are impacting our day-to-day lives, discussing topics that matter to you, even if just to share with your friends at your next get-together or in the stands at your child’s or grandchild’s soccer game. Have a topic you want to learn more about? Write to us at therelatableconomist@omers.com