I just wrapped up a troubling deep dive into our city’s housing landscape, and I’m genuinely concerned by what I’ve uncovered. According to a newly released report, Ontario is facing a significant housing construction slowdown, with Toronto feeling the brunt of this decline.
The Canada Mortgage and Housing Corporation’s latest forecast shows housing starts across Ontario are expected to plummet by over 21% next year. This translates to roughly 19,000 fewer new homes being built in 2025 compared to this year’s projections. For a city already grappling with housing affordability issues, this news couldn’t come at a worse time.
“We’re seeing a perfect storm of factors converging,” explains Erin McKenzie, senior housing analyst at Urban Solutions Toronto. “Rising construction costs, persistent interest rate pressures, and regulatory hurdles are forcing developers to pump the brakes on new projects.”
The numbers paint a concerning picture for our city. Toronto specifically is projected to see approximately 7,800 fewer housing starts in 2025 than initially anticipated. This represents a steeper decline than the provincial average, highlighting the intensified challenges within our urban core.
I spoke with Marcus Chen, who’s been searching for an affordable condo downtown for nearly eight months. “It feels like I’m chasing a moving target,” he told me while we met at a Leslieville coffee shop. “Every month I wait, prices climb higher while selection shrinks. This news about fewer new builds coming just makes the whole situation more discouraging.”
The construction slowdown arrives despite Premier Ford’s ambitious housing targets. The provincial government had pledged to build 1.5 million homes by 2031, but industry experts now suggest this goal appears increasingly unattainable given current trends.
Toronto’s Building Industry Association notes that development applications have dropped by nearly 35% compared to the same period last year. “Developers are hesitating to commit to new projects when the financial equations simply don’t add up,” says Rebecca Winters, the association’s policy director.
The housing starts forecast doesn’t just represent abstract numbers – it translates to real consequences for Torontonians. Rental vacancy rates, already hovering at critically low levels of 1.7% citywide, are expected to tighten further as fewer new units enter the market.
Last weekend, I attended a community housing forum in Scarborough where residents expressed mounting frustration. “We keep hearing about housing solutions, but where are they?” asked Jennifer McKay, a single mother who’s been on a subsidized housing waitlist for three years. “My kids and I are stuck in a basement apartment that floods every spring while rents everywhere else keep climbing out of reach.”
Industry experts point to several potential solutions. Streamlining the approval process for mid-density projects, reducing development fees for affordable housing, and incentivizing purpose-built rental construction could help counteract the declining starts.
“We need to move beyond the endless debate cycle and implement practical measures,” urges David Patel, economics professor at University of Toronto. “Other major cities worldwide have successfully addressed similar housing crunches through creative policy approaches.”
The provincial government has responded to the forecasted decline, with Housing Minister Paul Calandra issuing a statement acknowledging the challenges while reiterating commitment to housing targets. However, specific interventions to address the projected construction slowdown remain unclear.
For everyday Torontonians, the implications extend beyond housing itself. Construction slowdowns ripple through our economy, affecting employment in trades, materials supply chains, and auxiliary services. The Building and Construction Trades Council of Ontario estimates that each 1,000 housing starts supports approximately 2,900 direct and indirect jobs.
Having covered Toronto’s housing market for nearly a decade now, I’ve observed cycles of optimism and concern. However, this particular forecast feels different – more structural than cyclical. The fundamental disconnect between housing supply and population growth appears to be widening rather than narrowing.
As I wrapped up my reporting on this story, I couldn’t help reflecting on what this means for our city’s future. Toronto’s identity as a welcoming, opportunity-rich metropolis depends significantly on housing accessibility. Without decisive action to reverse this construction slowdown, we risk undermining the very qualities that make our city special.
The path forward requires collaboration between government, industry, and communities – a challenging proposition, but one that’s essential for Toronto’s continued vitality. Our housing crisis won’t be solved overnight, but allowing construction to decline sharply in 2025 would represent a significant step backward at precisely the moment we need to be moving forward.
