The Residential Construction Council of Ontario has reported a significant decline in housing starts within the Greater Toronto Area and the larger Greater Golden Horseshoe region during the first nine months of 2025. This drop sharply contrasts with the trends observed in recent years and raises concerns about the future of residential construction in these areas.
According to a study from the University of Ottawa's Missing Middle Initiative, which was commissioned by the council, housing starts in 34 municipalities of the region decreased by more than one-third compared to the same periods from January to September between 2021 and 2024. Specifically, the data indicates a staggering 51 percent reduction in condo apartment starts. Ground-oriented housing, which includes single-family homes and townhouses, also saw a significant downturn, with a reported 43 percent decline. However, amidst these declines, there was a notable increase in purpose-built rental units, which surged by 42 percent compared to the previous four years.
Richard Lyall, the president of the Residential Construction Council of Ontario, emphasized the gravity of the findings, stating that the report illustrates a dire situation for the residential construction sector. He remarked that the current data not only reflects the challenges faced by builders but also aligns with the concerns that the industry has been voicing for quite some time. The council's commentary suggests that the industry is facing a pivotal moment, referred to by Lyall as “staring into the abyss.”
This decline in housing starts coincides with the federal government's initiative to increase home construction across Canada. The budget announced in the previous month includes a pledge of $25 billion over the next five years aimed at fostering the development of new housing units. The federal budget highlights that the Canada Mortgage and Housing Corporation (CMHC) has estimated that Canada will require between 430,000 to 480,000 new housing units annually over the next decade in order to restore housing affordability to the levels seen in 2019.
The recent findings paint a concerning picture of the residential construction landscape in Ontario, especially in light of the pressing need for new housing to accommodate growing populations and combat affordability challenges. With reduced condo apartment and ground-oriented housing starts, the market seems challenged in meeting the housing demands of its residents. The substantial growth in purpose-built rentals may indicate a response to changing housing needs, but overall, the data reflects a tough environment for developers and potential homeowners alike.
As the situation evolves, stakeholders in the residential construction industry will be closely monitoring the impact of federal investment initiatives as well as the ongoing shifts in housing trends. This critical intersection between policy response and market dynamics will likely play a significant role in shaping the future of housing in the Greater Toronto Area and the Greater Golden Horseshoe region.
