Ontario saw a sharp decline in housing construction in 2025, with Toronto posting a 31% drop in housing starts that has put Premier Doug Ford’s goal of building 1.5 million homes by 2031 increasingly out of reach.
Housing starts across the Greater Toronto Area and Greater Golden Horseshoe region fell more than one-third in the first nine months of 2025 compared to the same period in the previous four years, according to a December report by the University of Ottawa’s Missing Middle Initiative, commissioned by the Residential Construction Council of Ontario.
Condominium apartment starts dropped 51% in the first three quarters, while ground-oriented housing starts fell 43%. Purpose-built rental housing provided the only bright spot, increasing 42% compared to the previous four-year average.
Canada Mortgage and Housing Corporation data released January 16 confirmed Toronto’s annual housing starts declined 31% in 2025, even as the national total rose 5.6% to 259,028 units.
“We are staring into the abyss,” Richard Lyall, president of the Residential Construction Council of Ontario, said in a December 1 press release. “The new home market has tanked.”
The housing construction slowdown triggered significant job losses. The University of Ottawa report estimated that reduced housing starts in the first nine months of 2025 translated into 35,377 fewer person-years of employment compared to the same period in the previous three years.
Ford’s government set a target in 2022 to build 1.5 million homes by 2031, requiring roughly 218,000 housing starts annually.
Ontario ranked last among Canadian provinces in the Missing Middle Initiative’s 2025 Provincial HOMES Report Card, receiving an overall grade of D. The report assessed housing policies and outcomes across 36 indicators, finding Ontario scored particularly poorly on avoiding harmful housing policies and positive affordability outcomes.
The Ontario government attributes the slowdown to high interest rates, elevated construction costs, and weak pre-construction sales. Industry experts point to lengthy approval processes, with development approvals in Toronto and Hamilton taking around 20 months on average, compared to under six months in Edmonton and Calgary.
The average home price in the Greater Toronto Area stood at $1,054,372 in October, according to the Toronto Regional Real Estate Board.
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