Nobody is building homes in Ontario anymore as market tumbles

Ontario is has found itself in quite the confounding real estate situation, with officials issuing urgent calls for more new housing while a record number of homes sit up for sale each month, untouched.

With home sales in such a lull, developers have acutely pulled back from building in the province, especially in Toronto, while pleading for government intervention in the form of less red tape, lower taxes and a cut to sky-high development charges that have, along with low levels of market activity, stalled tens of thousands of new units.

According to a new snapshot from the Canada Mortgage and Housing Corporation (CMHC), Ontario continues to pull down the residential construction stats for the rest of the country, as it has been for months while other areas see some recovery.

While the level of new housing starts has risen across Canada as of August (based on the six-month moving average of the seasonally adjusted annual rate), Ontario saw a dismal development turnout.

Comparing data from January-August of 2024 and January-August of 2025, the CMHC found that many provinces have seen double-digit percentage gains in the number of new homes that broke ground within those windows.

In Saskatchewan, there was a 50 per cent rise in housing starts in centres with over 10,000 residents. Quebec had a 36 per cent increase. The Prairies, Alberta, Nova Scotia, Newfoundland & Labrador? Upticks of 22 per cent, 21 per cent, 20 per cent and 19 per cent, respectively, across housing types. But in Ontario, a 23 per cent drop.

Chart comparing housing starts across the country in the period of Jan.-Aug. 2024 to the period of Jan.-Aug. 2025 from the CMHC.

Comparing simply last month to August 2024, though, the outlook is a little better, with a whopping 21 per cent reduction in single-family home starts in the province, but a slight two per cent climb in the number of other types of units. This averages out to a less drastic -4 per cent year-over-year overall.

The same is the case when looking at Toronto on its own, which was shown to have experienced a brutal 46 per cent nosedive when comparing housing starts in January-August of this year versus January-August of last year.

But, comparing just August to August, starts in Toronto were flat between the years, thanks to 13 per cent more condo, townhome and semi-detached developments kicking off last month than at the same time last year. (Construction on standalone homes fell 41 per cent, though).

Other Ontario cities where construction has fallen off a cliff when comparing year-to-date in 2024 and 2025 include Guelph (-70 per cent), Peterborough (-65 per cent), London (-53 per cent), Oshawa (-52 per cent), Windsor (-47 per cent) and Thunder Bay (-15 per cent).

Of Canada's numbers overall, the CMHC writes that August came in "well below the six-month trend line," a pattern that "is consistent with both our forecast and current market intelligence indicating a slowdown in the pace of housing construction."

"It is worth noting that current housing starts levels are generally reflective of decisions made when interest rates were receding and investor confidence was higher than it is today," the Crown corporation adds.