GTA housing starts plunge as builders warn of severe industry slowdown

Housing construction across the Greater Toronto Area and the broader Greater Golden Horseshoe has slowed dramatically in 2025, raising concerns about the future of Ontario’s housing supply and employment in the construction sector. A new analysis from the University of Ottawa’s Missing Middle Initiative shows that housing starts across 34 municipalities fell by more than one-third in the first nine months of the year compared with the average from 2021 to 2024.

The sharpest decline is seen in the condominium sector, where apartment starts have dropped by 51 per cent. Ground-oriented housing, including detached homes, semis, and townhouses, is also down 43 per cent. The only category showing growth is purpose-built rentals, which rose 42 per cent, reflecting the rising demand for long-term rental housing.

Industry representatives say the downturn has created a difficult climate for builders and workers. Richard Lyall, president of the Residential Construction Council of Ontario, warned that shrinking demand and stalled projects are taking a significant toll on employment. He noted that many developments have been paused or cancelled and that the slowdown is rippling through the broader economy.

Despite a pullback in new construction, affordability remains a central issue for buyers. The average home price in the region surpassed $1.05 million in October, limiting access for many would-be homeowners at a time when higher interest rates and economic uncertainty have cooled sales.

The report also evaluated municipalities based on five housing-related indicators. Half of the regions studied received a failing grade, while only a small group scored a C or higher. The findings suggest widespread challenges, including slower project approvals, weaker demand, and financial pressures on developers.

The decline in construction activity is also affecting jobs. The study estimates that reduced building activity resulted in more than 35,000 fewer person-years of employment between January and September, compared with the same period in previous years. This calculation is based on labour needs for different types of housing units, with detached homes requiring significantly more work hours than apartment units.

Economists warn that the sector’s downturn comes at a time when the country is under pressure to accelerate homebuilding. Federal targets suggest Canada must nearly double its annual pace of construction to restore housing affordability, requiring more than 430,000 new homes per year through the next decade.

National data also shows a broader slowdown. The annual pace of housing starts in October dropped by 17 per cent from the previous month, driven largely by declines in Ontario and British Columbia. While year-to-date numbers remain slightly higher than last year, economists say the trend points to mounting challenges for the construction industry amid rising costs and shifting demand.