Ontario’s housing slowdown is a full-blown economic emergency
Ontario’s housing slowdown is a full-blown economic emergency
According to the latest data from the Canada Mortgage and Housing Corporation, housing starts in Ontario declined sharply in 2025
By Dave Wilkes , Special to National Post
Published Feb 04, 2026
New home construction has long been a cornerstone of Ontario’s economy, supporting hundreds of thousands of jobs, generating billions in economic activity and tax revenue, and playing a central role in meeting the housing needs of a growing population. However, it is clear that that engine is stalling – and the implications of this go far beyond housing affordability. Housing sales and starts data from 2025 point to serious and compounding consequences for employment, future housing supply, government revenues, and the province’s long-term economic outlook.
To understand the seriousness of the situation at hand, it is important to understand how the new housing sector works. Housing is built through a 10-year pipeline that typically begins with land acquisition, planning, design, and approvals. Approximately half way through pre-construction sales start, followed by a construction start, and finally a completion when a unit is ready for occupancy, with years separating each stage. The volume of homes under construction and the level of activity at each stage of the pipeline at any given time determines the level of construction activity in the economy and, by extension, the number of jobs supported by the sector.
Across Ontario, that pipeline is now under significant strain as new home sales have declined to levels not seen since records started to be kept and publicly reported in 1981. In 2025, sales fell to approximately 15,000 units province-wide, down from historic levels of 65,000 to 85,000 homes annually. A decline of this magnitude will inevitably translate into fewer housing starts. By 2030, annual housing starts are expected to fall to roughly 40,000 units, including purpose-built rental, down from about 80,000 today.
These sales trends are further pronounced in the Greater Toronto Area, with new home sales reaching the lowest level ever recorded in 2025. Total sales for the year were just 5,314 units. Single-family sales were down 63 per cent from the 10-year average, while condominium apartment sales were down a staggering 89 per cent.
On the construction and housing starts side of the equation, the situation is not any better. According to the latest data from the Canada Mortgage and Housing Corporation, housing starts in Ontario declined sharply in 2025. The province recorded 62,561 housing starts, down from 72,118 in 2024, representing a 13 per cent year-over-year drop in the number of new homes beginning construction.
This decline is particularly concerning because housing starts today reflect sales decisions made years earlier. At a time when starts are already decreasing, a sustained period of weak sales means fewer projects entering the pipeline, fewer homes under construction, and a further erosion of construction activity and employment in the years ahead. This also means low new home supply in the future, even as the population continues to grow.
On the employment side, the housing construction sector has been one of the province’s most reliable employment engines. Over the past five years, from 2020 to 2024, new home construction supported an estimated 222,700 jobs across Ontario on average each year. This includes more than 104,000 direct construction jobs, nearly 73,000 indirect jobs among suppliers and related industries, and more than 45,000 induced jobs supported by the spending of those workers.
If the current slowdown persists, the economic consequences are severe. Not only could it result in the loss of approximately 100,000 jobs from a residential construction workforce of roughly 225,000 – but this would mean the loss of almost $13 billion in wages and earnings by 2030 which would have widespread implications, including an estimated $1.3 billion in lost personal and corporate income tax revenue annually.
Furthermore, the sector’s contribution to provincial GDP would shrink dramatically, from $31.7 billion annually to just $10.4 billion. Governments would also feel the impact. Annual losses are projected at $2.4 billion in provincial sales tax, $1.4 billion in income tax, $700 million in land transfer tax, and $3.9 billion in municipal development charges and related fees – a combined $8.5 billion hit to public revenues every year.
One of the most effective and immediate steps governments can take is to remove the HST from new homes, which would immediately provide affordability. Reducing sales tax would deliver direct, meaningful savings to buyers while helping restore viability to projects that are currently stalled. Now is the time for both the federal and provincial governments to fully eliminate the HST on all new homes (not just for new home buyers) to lower the cost of housing and get buyers back into the market and the industry back to work.
It is obvious that this is no longer just a housing market issue. It is an economic emergency that demands decisive action – and governments must take action.
Dave Wilkes is President and CEO of the Building Industry and Land Development Association (BILD), the voice of the home building, land development and professional renovation industry in the GTA. For the latest industry news and new home data, visit www.bildgta.ca.
www.nationalpost.com/life/homes/ontarios-housing-slowdown-is-a-full-blown-economic-emergency
