Why the Poor Are Finding It Harder to Buy a Home? Statistics Canada Data Reveals How the Wealth Gap Is Tearing Apart the Housing Market

In 2025, the Bank of Canada cut its policy rate from 3.25% to 2.25%, a cumulative 100 basis points of easing. However, the impact of these cuts was completely opposite for different income groups: low-income households were hurt by falling interest income, while high-income households benefited from rising stock markets.

▌ Low-Income Households (Bottom 20%): Average disposable income grew just +2.6%, below the national average of +3.8%. Wage growth was only +2.3% (national +3.1%), and self-employment income +3.9% (national +5.1%). Worse, net investment income fell — investment earnings declined by $443 (mainly from lower deposit interest), only partially offset by a $267 reduction in interest payments. These households relied on increased social assistance and government retirement benefits to fill the gap.

▌ High-Income Households (Top 20%): Average disposable income grew +4.1%, above the national average. Self-employment income surged +9.1%, and transfer payments (mainly employer-sponsored retirement benefits) rose +4.7%. Investment earnings grew +1.4% (national +0.5%), driven by strong gains in equity and investment fund holdings.

▌ The Result: The income gap — the difference in disposable income share between the top 40% and bottom 40% — widened from 46.4 percentage points in 2024 to 46.7 percentage points in 2025. This marks the second consecutive year of expansion, reversing the brief narrowing trend seen in the early pandemic period.

🔗 Housing Market Implication: High-income households, profiting from stock market gains, have greater purchasing power to enter the real estate market, supporting demand for high-priced assets like detached homes. Meanwhile, low-income households face not only slow income growth but also shrinking deposit returns, further eroding their home-buying capacity. This explains why Vancouver detached sales rose 8.3% YoY while the condo market remains depressed due to weak first-time buyer demand.

In 2025, total Canadian household net worth grew +5.3%, driven entirely by financial assets (+9.9%), primarily from stock market gains. Meanwhile, real estate asset values declined -0.7%, while mortgage debt increased +4.2%.

▌ Wealthiest 20% of Households: They control 65.7% of national net worth, averaging $3.5 million per household. Their wealth grew the fastest (+6.0%), with financial assets up +10.8% (national +9.9%), while mortgage debt grew just +0.7% (the lowest of any group). They are the biggest beneficiaries of the stock market boom and mere "bystanders" in the housing correction.

▌ Poorest 40% of Households: They hold just 3.0% of national net worth, averaging $81,650 per household. Their wealth grew the slowest (+2.1%), with financial assets up only +6.1%. More concerning, they increased their mortgage debt (+7.5%) to buy homes, yet their real estate asset values rose only +3.5% — meaning they are taking on higher debt to acquire depreciating or stagnant assets.

▌ The Result: The wealth gap — the difference in net worth share between the top 20% and bottom 40% — widened from 62.1 percentage points in 2024 to 62.7 percentage points in 2025.

🔗 Housing Market Implication: The rich no longer rely on real estate for wealth growth — their purchasing power comes from financial assets, not home equity. This explains why, even as home prices correct, the wealthy still have the capacity to buy detached homes. Meanwhile, the poor are forced to take on higher debt just to enter the market, becoming the most vulnerable group in the downturn. This contrasts with Saskatoon's record-high prices amid inventory crunch — regional affordability differences are reshaping population flows.

Changes in net saving best reflect household financial health. In 2025, the trends for different income groups moved in completely opposite directions:

▌ Lowest-Income Households (Bottom 20%): Net saving deteriorated as consumption expenditure growth (especially for housing and utilities, insurance and financial services, and transportation and storage) outpaced disposable income growth. The second quintile (bottom 20%-40%) saw the largest decline in net saving (-7.9%), with income growth of just +2.3% versus consumption growth of +3.8%. Statistics Canada noted: "These households may be bridging the gap between income and consumption through borrowing."

▌ Highest-Income Households (Top 20%): Net saving improved the most (+3.9%), as their income growth (+4.1%) outpaced consumption growth (+3.9%).

🔗 Housing Market Implication: Low-income households are being forced to take on more debt just to maintain consumption levels — a dangerous situation in a high-interest-rate environment. 2025-2026 marks the peak of the mortgage renewal cycle, with many households who bought at ultra-low rates in 2020-2021 facing sharply higher monthly payments. If income growth cannot keep pace, default risks will rise. Combined with Canada's unemployment rate holding at 6.7%, this represents the biggest downside risk for the 2026 housing market.

Households under age 35 present a mixed picture:

▌ Positive Signals: Young households saw wealth growth of +5.7%, above the national average of +5.3%, driven by strong financial asset gains (+12.2% vs national +9.9%). Their debt-to-income ratio fell from 169.8% to 166.0%, a 3.8 percentage point improvement — the largest of any age group. This suggests young people are actively managing debt, possibly through family support or other means.

▌ Warning Signs: Despite falling interest rates, young households' interest-only debt service ratio (DSR) remained high at 10.5%, unchanged from last year. Statistics Canada explained: "Younger households may be renewing or refinancing their remaining debt at higher interest rates relative to what they had acquired at the beginning of the COVID-19 pandemic." Additionally, their mortgage debt increased through 2025 (Q2 +1.7%, Q3 +2.1%, Q4 +3.7%), indicating they are entering the market as prices fall.

▌ Households Aged 35-44: They have the highest debt-to-income ratio of any age group at 245.8%, though this improved 1.6 percentage points from last year. Their DSR of 10.9% is the highest among all age groups, but also saw the largest decline (-1.1 percentage points), as strong income growth outpaced interest payments.

▌ Households Aged 55-64: They recorded the fastest growth in mortgage debt (+6.0%), likely to purchase investment properties or help younger relatives buy homes. This reflects accelerating intergenerational wealth transfer.

🔗 Housing Market Implication: Young households are "buying the dip," but their high DSR makes them extremely sensitive to interest rate changes. If rates remain high or rise further in 2026, these new entrants will face the greatest monthly payment pressure. Meanwhile, the increase in mortgage debt among 55-64 year olds suggests parents are helping children enter the housing market — a microcosm of Canada's affordability crisis evolving into an intergenerational inequality crisis. For strategies, see 2026 Canadian Home Buying Strategy.

The Statistics Canada report's findings form a complete narrative闭环 with HousingAI's ongoing housing market data tracking:

▌ The Rich Buy Detached Homes, the Poor Buy Condos (or Can't Buy at All). The wealthiest 20% saw the fastest wealth growth (+6.0%), with financial assets up +10.8%, giving them ample purchasing power to compete for detached homes. This is the underlying driver of Vancouver detached sales up 8.3% YoY and Montreal detached prices up 7% — not wages, but asset appreciation.

▌ The Poor Are Forced to Leverage, Becoming the Most Vulnerable. The poorest 40% saw the slowest wealth growth (+2.1%) yet increased their mortgage debt (+7.5%) to buy homes. Their real estate assets grew only +3.5%, meaning debt is growing faster than assets. If home prices continue to fall, these households face negative equity risk. This directly correlates with the condo market's inventory overhang and price declines — first-time buyer purchasing power is insufficient, removing the most important demand pillar for condos.

▌ Young Households Are Betting on the Future with Little Room for Error. Young households are "buying the dip," but their DSR of 10.5% means $10.50 of every $100 in income goes to interest payments. If rates rise unexpectedly or income growth slows, they will be the first to feel the pain. This also explains why the pre-sale market is frozen (only 124 units in BC in Q1) — young buyers are extremely price- and rate-sensitive, preferring to wait rather than buy at current levels.

▌ Intergenerational Wealth Transfer Accelerates, But Worsens Inequality. The fastest growth in mortgage debt among 55-64 year olds (+6.0%) likely reflects parents helping children buy homes. This means young people with "parental support" can enter the housing market, while those without are further marginalized. The housing affordability crisis is evolving into an intergenerational inequality crisis.

Based on the Statistics Canada report and current housing market data, Canada's economy and housing market face three major risks in 2026:

Risk 1: Mortgage Renewal Shock. Mortgages originated during the ultra-low rate period of 2020-2021 will renew in 2025-2026. Young and low-income households already have high DSRs, and monthly payments could increase 20-40% upon renewal. If income growth can't keep pace, default rates could rise. See 2026 Mortgage Stress Test Explained.

Risk 2: Cooling Labor Market. Wage growth slowed to 3.1% in 2025, with weakness in manufacturing, resources, and professional services. If trade wars escalate, unemployment could breach 7%, further weakening housing demand.

Risk 3: Widening Inequality May Trigger Policy Intervention. The widening income and wealth gaps could trigger policy responses such as wealth taxes or higher capital gains taxes. Both BC and federal governments have signaled potential action.

One Unchanged Trend: K-Shaped Divergence Will Persist. The rich will continue to benefit from financial assets, supporting detached home markets. The poor, dependent on labor income and deposit returns, will remain under pressure in the condo and rental markets. There will be no "rising tide lifts all boats" in Canada's 2026 housing market — only divergence.