Ontario Housing Starts Drop 25% Threatening National Affordability

Ontario is facing a significant decline in housing starts, with a 25% drop in the first half of 2025 compared to 2024, jeopardizing Premier Doug Ford's goal of 1.5 million new homes by 2031 and undermining federal housing targets. While Ottawa shows growth in housing starts, cities like Toronto and Guelph experience sharp declines, impacting affordability and straining housing markets nationwide. Despite federal and provincial spending increases, including investments in rental housing projects like Toronto's Vivant at Bedford Park, affordability remains a critical issue due to the misalignment of house prices, interest rates, and household incomes. RBC reports that homeownership costs still consume a high percentage of income in major cities, with Vancouver and Toronto seeing costs at 92.7% and 68.3% of median household income respectively. On the federal level, bipartisan efforts such as the ROAD to Housing Act of 2025 aim to boost housing supply through regulatory and programmatic reforms, even as the White House shifts focus on homelessness policy. Meanwhile, the Toronto real estate market shows signs of selective recovery in detached home sales in certain neighborhoods, despite overall low activity and ongoing affordability challenges.