Has First-Time Buyer Purchasing Power Declined?

In 2016, the mortgage payment on a single-family home at the median price in the Montreal census metropolitan area (CMA) represented 30% of a household’s median income. In 2021, 40.5%. In 2026, the same calculation gives 47.7%, with an estimated income. Here is where these figures come from, what the federal rules took away and gave back, and what the comparison does not allow you to conclude.

First-time buyer purchasing power, measured three times

Four pieces of data, taken at the same dates: the third-quarter (July to September) median price published by APCIQ (the Quebec Professional Association of Real Estate Brokers), the median total household income from the Statistics Canada census, the Bank of Canada’s 5-year posted rate, and the payment that results from them.

Two territories. The way the Montreal CMA is divided has changed: five major sectors in the 2016 barometer, six in 2021 and in 2026, with Saint-Jean-sur-Richelieu. Laval keeps the same boundaries from start to finish. Both are presented.

Income lags by one year. The 2016 census measures 2015 incomes, the 2021 census those of 2020. No more recent census income could be consulted, and APCIQ’s Q3 2026 barometer still relies on the 2021 Census. The 2026 income is therefore estimated.

Prices, incomes and rates: 2016, 2021 and 2026

Sources: Q3 2016, 2021 and 2026 barometers (APCIQ, FCIQ in 2016), 2016 and 2021 censuses, Bank of Canada series V80691335 (July to September average).

Prices more than doubled, incomes did not. From 2016 to 2026, the median single-family price rose 112% in the CMA and 107% in Laval; the condo median, 74% and 95%. Between the two censuses, median income grew 23% in the CMA and 21% in Laval, while single-family homes gained 65% and 62%. The neighbourhood-level detail is in the Laval real estate market by sector.

The posted rate is not the rate paid. The Bank of Canada uses the mode of the rates applied by the six major chartered banks. It is used here because it has been published the same way every week since 2016. The payment calculated with it is a benchmark, not the payment in an actual file.

The mortgage payment as a share of income

Identical assumptions for all three years: a 10% down payment, a 25-year amortization, the quarter’s posted rate, semi-annual compounding, and median pre-tax income divided by 12. The mortgage loan insurance premium, taxes and heating are excluded.

The 2026 estimate. The 2020 income is indexed to Canada’s consumer price index as published by the Bank of Canada: an average of 136.96 in 2020 and 170.0 in September 2026, a factor of 1.241. This gives $94,334 for the CMA and $105,505 for Laval. It assumes constant real income, which the Canadian Income Survey supports for Quebec: in constant 2024 dollars, the median after-tax income of families and unattached individuals there was $69,500 in 2020 and $68,800 in 2024.

* 2026 income estimated.

Two periods, two causes. From 2016 to 2021, nearly all of the increase comes from price: at the 2016 rate, the 2021 loan would have cost $2,545 a month instead of $2,565. From 2021 to 2026, price accounts for a 29% increase in the payment and the rate for a further 13% increase.

The income it would take. For the 2026 payment to weigh as much as it did in 2021 in the CMA, median income would have to reach about $111,000, 46% more than in 2020. To redo the exercise with your own figures, use the affordability calculator.

What the rules took away, and what they gave back

What was taken away: the stress test. As of October 17, 2016, according to the Department of Finance, every high-ratio insured buyer must qualify at the higher of their contract rate and the Bank of Canada’s 5-year posted rate, with a gross debt service (GDS) ratio of no more than 39% and a total debt service (TDS) ratio of no more than 44%. Since June 1, 2021, OSFI (the Office of the Superintendent of Financial Institutions) has required, for uninsured loans, the higher of the contract rate plus 2 points and 5.25%; the Department of Finance maintains the same formula for insured loans. OSFI’s page, modified on January 29, 2026, still sets out this rule. Example: at a negotiated rate of 4%, the lender checks your capacity at 6%. On the median loan of $580,950, that means $3,717 a month instead of $3,056.

What was given back. Since December 15, 2024, a 30-year amortization has been allowed for first-time buyers and buyers of a new home, and the ceiling for insured loans, set at $1 million in 2012, has risen to $1.5 million. The Home Buyers’ Plan (HBP, RAP in French) was raised in the 2019 budget, then again in 2024. The First Home Savings Account (FHSA, CELIAPP in French) has been available since April 1, 2023, at $8,000 a year. The GST rebate for first-time buyers covers a new home bought from a builder under an agreement entered into on or after March 20, 2025.

Who is still buying: homeownership among young households

Share of households that own their home, by age of the primary household maintainer: Statistics Canada data adapted by the Institut de la statistique du Québec (ISQ, Quebec’s statistics agency) for Quebec, and census profiles for the CMA and Laval.

A decline on every line. For Quebec as a whole, the ISQ notes that the drop from 2016 to 2021 is the first since 1971. Among households aged 25 to 34, the decline reaches 1.9 points.

What this table does not cover. It stops at the 2021 census, before the posted rate went from 4.79% to 6.09%. Nor does it say whether young renter households postponed their purchase or gave up on it.

What offsets it in 2026: FHSA, HBP, 30-year amortization

The 30-year amortization. On the CMA median loan at 6.09%, the payment goes from $3,748 to $3,488, or $260 less a month, and its share of the estimated income from 47.7% to 44.4%. At a constant rate over the entire amortization, which does not happen with 5-year terms, the total of all payments would increase by $131,386.

The FHSA and the HBP act on the down payment. One person can draw up to $100,000 from them ($40,000 and $60,000), if the savings exist. Going from a 10% to a 20% down payment on the CMA’s median single-family home lowers the payment from $3,748 to $3,332. At $8,000 of contribution room a year, reaching the FHSA ceiling takes five years.

The tax rules for these accounts and Quebec’s assistance programs are detailed in first-time buyer tax benefits. The choice between these levers is one to confirm with your accountant and your mortgage broker.

What the figures say, and what they do not

What they say. Under the same assumptions, the payment on the CMA’s median single-family home was multiplied by 2.4 in ten years, and the condo payment by 2.0. The condo remains the least burdensome way in. In Laval, where median income is higher, the shares are 3 to 6 points lower than in the CMA.

What they do not say. A first-time buyer’s income is not the median income of all households. The gap between the posted rate and the negotiated rate is not measured here. The insurance premium, taxes and heating, which the lender does count, are excluded. A median mixes very different neighbourhoods. And nothing here says where prices or rates will go.

Frequently asked questions

Has first-time buyer purchasing power declined since 2016? Measured by the payment on the median single-family home in the Montreal CMA, yes: 30.0% of median income in 2016, 40.5% in 2021 and 47.7% in 2026, with an estimated income. For condos: 24.7%, 29.5% and 32.1%.

Is buying a first home harder than in 2021? The median single-family price rose 29% in the CMA and the posted rate went from 4.79% to 6.09%. On the other side of the ledger, the HBP went from $35,000 to $60,000, the FHSA exists and a 30-year amortization is allowed. The outcome depends on your savings and your income, not on the median.

Does the stress test still apply in 2026? Yes, to both insured and uninsured loans, according to the Financial Consumer Agency of Canada. OSFI no longer expects it for a straight switch of an uninsured loan to another lender at renewal, with no increase in the amount or the amortization. A purchase is not a renewal.

Who counts as a first-time buyer for the 30-year amortization? According to the Department of Finance, a person who has never bought a property, who has not lived in the past four years in a home owned by them or their spouse, or who has recently gone through the breakdown of a marriage or common-law partnership. Your lender or mortgage broker confirms eligibility.

To go further, read what salary you need to buy in Montreal or Laval and how the policy rate makes its way to the Montreal market.

Want to redo this calculation with your income, your savings and the area you are interested in? Write to me. Financing is then confirmed with your lender or mortgage broker. Service in French, English and Arabic.

Georges Matar

Residential Real Estate Broker · RE/MAX DU CARTIER INC.

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