Slow and steady might win some races, but when it comes to housing, Ontario is getting lapped by the rest of the country.
Driving the news: Housing starts in Canada are the strongest they’ve been in four years, but in Ontario, the six-month average for new builds has fallen to its lowest level in a decade, according to a new RBC analysis.
- While Alberta and Atlantic Canada see record-high residential construction, housing starts in Ontario declined by over 20% last month compared to July 2024.
Why it’s happening: Ontario is one of the toughest places in the country to build as prices for land, labour, and materials have all shot up. In fact, construction costs in Ontario have grown the most out of any province in Canada over the last eight years.
- At the same time, a glut of resale listings — often cheaper than new builds — has pulled demand away from new projects.
Why it matters: Ontario is the most populous province in the country and takes in the lion’s share of new immigrants, particularly in the GTA. With more housing demand than anywhere else in Canada, a slowdown in building will only deepen the already-dire supply gap.
Bottom line: There are a lot of new condo units in Ontario that just aren’t selling. Until that changes, developers and investors won't be incentivized to keep building, even if it ends up creating supply problems down the road.—LA