If you want to understand where Ontario’s housing market is really headed, stop watching prices and start watching cranes.
Because right now, residential construction in the GTA isn’t slowing. It’s collapsing.
The numbers are stark. Toronto housing starts are down 58 per cent. GTHA single-family sales have fallen 71 per cent. In some condo segments, sales are down as much as 90 per cent. According to the Building Industry and Land Development Association, 2025 is shaping up to be the worst year for new home sales in the GTA in 45 years.
This isn’t noise. It’s structural.
Developers aren’t pulling back because demand disappeared. They’re pulling back because projects no longer pencil. Higher financing costs, construction inflation, policy uncertainty, and a presale-dependent condo model that no longer works have converged at the same time. When risk rises faster than returns, capital freezes. And when capital freezes, supply disappears.
That’s the part too many people miss.
Today’s slowdown in construction doesn’t show up immediately as a crisis. In the short term, buyers feel relief. More negotiating power. Softer sentiment. Fewer bidding wars. But housing markets don’t respond in real time. They lag.
What’s being cancelled or delayed in 2025 is the supply that was supposed to arrive in 2027, 2028, and beyond.
And once that pipeline breaks, it doesn’t restart quickly.
This is why construction data matters more than monthly sales stats. You can’t fix a future supply shortage after the fact. You either build ahead of demand—or you pay for it later through higher rents, tighter inventories, and renewed affordability pressure.
For buyers, this environment rewards patience and foresight.
For sellers, it reinforces the importance of timing and positioning.
For investors, it’s a reminder that scarcity is often born during periods of pessimism, not optimism.
Ontario’s housing problem isn’t just about prices being too high or demand being too strong.
It’s about supply quietly disappearing while everyone’s watching the wrong indicators.
By the time the impact feels obvious, it will already be too late to change it.
