Toronto/IBNS: Canada’s housing market has witnessed the largest improvement in affordability in nearly four years in the first quarter of 2023, according to a report from economists at the National Bank of Canada.

Canada’s 10 major census metropolitan areas showed improved housing affordability for the first time in all markets in two and a half years, with the largest improvements occurring in Vancouver, while the least affordable Canadian city for buying a home was Hamilton and Toronto.

By contrast, Calgary, Edmonton, and Quebec saw the smallest increases in improvement, the report notes.

The economists note that the average mortgage payment as a percentage of income (MPPI) improved.

Meanwhile, there was a decline of 14 basis points in the benchmark five-year fixed rate mortgage used to calculate affordability.

Factors contributing to the improvement in housing affordability, according to the report, were restrictive interest rates, a decrease in home prices and rising incomes.

National Bank says in the second quarter of 2023. it’s expecting to see a slight easing of pressure on interest rates.

(Reporting by Asha Bajaj)