Housing Starts Collapse in Toronto
In a staggering blow to the Greater Toronto Area (GTA), housing starts have plummeted by 58% in the City of Toronto and 29% across the rest of the GTA in the first five months of 2025 compared to the previous year. This dramatic decline is not an isolated incident but rather a continuation of a troubling trend, as reported by the Missing Middle Initiative. Between 2022 and 2024, the number of housing starts fell by 10% in the City of Toronto, 22% in the rest of the GTA, and an alarming 26% in Ontario's metropolitan areas outside the GTA.
New Home Sales Are in Freefall
The collapse of new home sales paints an even bleaker picture. New single-family home sales in the GTA have dropped by a staggering 73% from ten-year averages, while new condo sales have plummeted by an eye-watering 90%. This decline indicates a sharp contraction in the housing market, which has direct implications for employment and government revenue.
Jobs at Risk in a Failing Market
According to an Altus Group report prepared for BILD, if current trends continue, annual sales of new single-family homes could decline from 10,000 to just 3,000 units, while new condo apartment sales could decrease from 22,000 to a mere 2,000 units per year. Such a dramatic fall would lead to the loss of approximately 41,000 jobs in the GTA, exacerbating an unemployment rate that has already jumped to 9.7% from 8.3% a year ago.
Government of Ontario Premier Doug Ford speaking at press conference ...
Government Revenue Faces Catastrophic Decline
This housing crisis not only threatens jobs but also poses a severe risk to government finances. Municipalities in Ontario rely heavily on housing construction for revenue, collecting over $4 billion annually in development charges. As reported by the Missing Middle Initiative, the combined fiscal impact of reduced housing starts could amount to a staggering $6.6 billion per year across all three levels of government.
Tax Revenue Losses Will Be Devastating
The Canadian Centre for Economic Analysis (CCEA) estimates that each new single-family home generates approximately $390,000 in taxes across federal, provincial, and municipal governments. With the projected drop in housing starts, the loss of 27,000 annual housing starts would lead to a catastrophic revenue decline, threatening vital public services and programs.
The Need for Immediate Action
Despite federal and provincial commitments to double housing starts, the reality is that new construction is in freefall. Policymakers must recognize that inaction is not an option. Without significant reforms to address the cost-of-delivery challenges in the housing sector, including enhanced HST New Housing Rebates for owner-occupiers, Ontario faces an unprecedented fiscal crisis.
Public Policy Must Reflect Urgent Needs
With the potential for a multi-billion-dollar financial hit looming, governments must consider the implications of their housing policies. A proactive approach to address the housing crisis is essential not just for economic recovery but also for ensuring that marginalized communities are not disproportionately affected by the fallout of this crisis. The urgency for effective policy action has never been clearer, as the consequences of inaction will resonate for years to come.
Toronto home sales rise to five-month high in June | Reuters
