Toronto and Vancouver are looking more like New York, Sydney and London, and that could spell the end to middle-class Canadians’ dreams of owning a home in either of those cities, a new report from Desjardins Group says.

“Canada has long defined middle-class success through homeownership,” Kari Norman, a senior economist at Desjardins, said in a note on April 30. “Today that model is under strain, but not uniformly across the country.”

Toronto and Vancouver are mimicking a “housing pattern already established in cities that serve as command centres of the world economy,” he said. For many people, that means renting is increasingly the final stop in their housing journey, not a stepping stone to homeownership as the gap between home prices and wages turns into a chasm.

Toronto and, to a lesser degree, Vancouver have succumbed to “global city syndrome,” filling the function of “command and control centres” for financial services, corporate headquarters, professional expertise and international capital flows.

Measures of urban globalization rank Toronto among centres such as Frankfurt and Chicago for its role in international finance, while the World Cities index considers Toronto a highly integrated “global node.”

That’s likely considered good news for a city that has always touted itself as world-class, but there are downsides.

“Global city status is associated with persistent housing affordability pressures as compared to national norms,” Norman said, adding that homeownership levels undercut national averages. “Toronto and Vancouver display several of these characteristics.”

For example, price-to-income ratios in London, New York and Sydney are higher than their respective national averages. In Toronto and Vancouver, price-to-income ratios also come in well ahead of Canada’s average of 7.5 times the national after-tax income at 12.9 and 10.7, respectively. Demographia, a research consultant, classified cities with income ratios of more than nine times the national income as “impossibly unaffordable.”

Desjardins said cities with global status often suffer from income disparity given the concentration of highly paid professionals and lower-paid service workers needed to support urban economies.

About 30 per cent of Canadians earn less than $40,000 per year, while under 10 per cent earn more than $70,000, compared with 37 per cent and 18 per cent, respectively, in Toronto.

The disparities between national trends and global cities continue into the housing market.

In London, 47 per cent of residents own their home compared with 62 per cent nationally, while in the New York-New Jersey area, the ownership rate was 49 per cent versus a national rate of 65 per cent. In Toronto, 52 per cent owned their home, according to the most recent census data in 2021, while it was 46 per cent in Vancouver, compared to 67 per cent nationally.

Norman said the upcoming 2026 census is expected to show homeownership rates in major Canadian centres declined, with Toronto and Vancouver leading the way.

“The question may not be how to return affordability and ownership to past norms in Toronto and Vancouver; it’s possible that ship has sailed,” he said.

Norman estimates that in order to restore affordability in these cities, incomes would need to be 60 per cent to 80 per cent higher than the national average to “return price-to-income ratios to Canadian norm” or interest rates would need to fall to an “implausibly low” zero per cent to right the debt-service ratio.

Otherwise, home prices would need to fall 25 per cent to 40 per cent, which would be “a decline that would surely entail significant economic and social consequences,” he said.

Instead, Canada needs to build a large enough supply of rental housing to provide a stable option for families to live in long term, rather than focus on smaller, cheaper units that prioritize investor returns.

  • Posthaste: Why the threat of Bank of Canada rate hikes could reignite the housing market
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Canada’s gross domestic product edged up by 0.2 per cent in February and preliminary figures suggest the economy grew in the first quarter, reversing the momentum from a contraction that ended 2025.

The new data, released by Statistics Canada on Thursday, showed February’s growth was primarily driven by goods-producing industries, which expanded by 0.4 per cent.

Initial estimates for March also suggest that GDP was “essentially unchanged” for the month, with increases in the wholesale trade as well as transportation and warehousing sectors offset by decreases in retail and resource extraction. — Paula Tran, Financial Post

  • The Economic Club of Canada will host a panel discussion in Toronto on Middle Power, Major Stakes — Canada in a New Global Order
  • Today’s data: Canada and U.S. S&P Global manufacturing PMIs, U.S. Institute of Supply Management manufacturing PMI, Wards total vehicle sales
  • Earnings: Magna International Inc., Hudbay Minerals Inc., Real Matters Inc., Imperial Oil Ltd., Brookfield Renewable Partners LP, Pizza Pizza Royalty Corp.
  • Here’s how and when you have to pay tax in instalments to the CRA
  • Canada selected as host country for new global defence bank
  • Trump signs Presidential Permit for Bridger pipeline using Keystone XL assets
  • Ontario lays foundation for first new nuclear reactor in decades

Read the full story here. This week in FP Answers, Andrew wants to know if he was right to stop his mother, 64, from buying an annuity with her $300,000 in retirement savings because he had concerns about the product. Will the balanced portfolio of low-cost exchange-traded funds (ETFs) that he set up for her instead be a good long-term investment ? Find out what the financial planner had to say.

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McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

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

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