Toronto Housing Starts Near 30-Year Low Amid Market Weakness

Toronto's housing market is experiencing its sharpest slowdown in decades, with housing starts plunging 44% in the first half of 2025 to levels not seen since 1996, primarily driven by a 60% drop in condominium projects due to financing difficulties and waning investor interest. Unsold condo inventory reached a record high, and pre-sales hit their lowest point in 30 years, while rental construction has declined only modestly, aided by government financing tools and lower land prices, with some condo projects being converted to rentals. Average home prices in the Greater Toronto Area have declined over 20% from their 2022 peak, falling below 2017 inflation-adjusted values, amid rising financial strain visible in nearly 3% of listings being power-of-sale properties and a 9% unemployment rate discouraging buyers. The Ford government faces criticism for failing to meet Ontario's housing targets, with new home starts dropping 25% year-on-year and Ontario emerging as the weakest province for residential construction, especially in Toronto where confidence is notably low. Luxury homes have also suffered significant losses, exemplified by a multimillion-dollar Toronto property sold at a $1.1 million loss after multiple price reductions over two years. The ongoing housing shortfall coupled with economic uncertainty, inflation, and trade pressures is expected to prolong the market's weakness and exacerbate affordability challenges in the city.