One city is bucking the trend as housing affordability improves across the country: Quebec City.

The average household income required to service an average mortgage in Quebec’s capital has climbed 1.6 per cent since 2024, making it the only one of Canada’s 62 biggest cities to experience a deterioration of affordability over the two years, according to a recent survey from Royal Lepage.

The city has also recorded the highest year-over-year aggregate home price increase over the past eight consecutive quarters.

Phil Soper, chief executive of Royal LePage , said the slow demand in the major cities such as Toronto, Vancouver and Montreal has people moving to affordable regions.

“Over the past two years, home prices in Canada’s major urban centres — particularly Toronto, Vancouver and their surrounding communities — have softened, as demand in these higher-cost regions has been tempered by geopolitical and economic uncertainty, reduced immigration levels and an unprecedented increase in supply,” he said in the report. “At the same time, cities where home prices are lower have seen more robust demand as buyers seek an entry point into the market, pushing prices up as a result.”

Overall affordability includes a number of factors, including cost of living and the local economy, both of which can greatly vary from one city to the next.

Lethbridge, Alta., is the most affordable city in the country, with about 18.9 per cent of the average household’s monthly income required to service a mortgage payment.

Saint John, N.B., came in second at 19.6 per cent, while Thunder Bay, Ont., at 20.3 per cent, Red Deer, Alta., at 24.9 per cent and Regina at 25 per cent rounded out the top five. Edmonton at 26.3 per cent and Winnipeg at 27.9 per cent also cracked the top 10.

Quebec City had previously cracked the top 15 most affordable cities in 2024, but fell to 18th this time with an affordability factor of 32.4 per cent.

It’s clear that secondary cities are offering the biggest deals at the moment and most prospective homebuyers are taking notice. More than half of the respondents to Royal Lepage’s survey would move to one of the 15 most affordable cities if they could find a job or work remotely.

“Home prices in Canada’s largest cities have moderated over the past couple of years, but for many buyers, the math still doesn’t work,” Soper said. “As barriers to entry remain high in the country’s most expensive urban centres, relocating to a more affordable city is becoming less of a last resort and more of a deliberate strategy. Aspiring homeowners who cannot secure a foothold in these markets are seriously weighing their options.”

Still, moving to a more affordable city may sound attractive in principle, it becomes much harder in reality.

“Many people dream about relocating to a more affordable city or province, yet the number that actually relocate is smaller,” he said. “Career opportunities, family obligations and established social networks are powerful forces.”

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Canada’s inflation rate hit 3.2 per cent in May, as high gas prices drove up overall inflation.

Gas prices climbed 33.2 per cent in the month, as the war in Iran halted oil shipments along the Strait of Hormuz. The rise was the largest gain in gas prices since July 2022.

While gas prices are the headliner, food prices also climbed 4.3 per cent in May, while shelter prices rose 1.7 per cent and air travel rose 7.4 per cent.

The inflation figures now have economists expecting the Bank of Canada to hold interest rates at its next announcement.

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McLister on mortgages

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Today’s Posthaste was written by Ben Cousins with additional reporting from Financial Post staff and Bloomberg.

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