Ontario Sees Steep Drop-off in Construction, New Tenants

Housing construction in Canada’s Ontario province has sunk to a new low.

A new study from the University of Ottawa’s Missing Middle Initiative found that home construction starts are down in 2025 compared to the previous four-year period, Yahoo Finance reported.

Housing starts and sales in 34 municipalities across Greater Toronto and neighboring cities in Southern Ontario dropped 40 percent in the first six months of 2025 compared to an average of the same period from 2021 through 2024. Pre-construction condo sales tumbled 89 percent, while other homes were down 70 percent.

Pre-sales being down more steeply than housing starts is especially concerning, according to the report. That’s because construction starts usually reflect market decisions made years prior; by contrast, pre-sales, however, “are a better indicator of the market’s current health and are indicative of future housing starts.” Overall in Greater Toronto, 22 of 34 municipalities received an “F” grade on both housing starts and pre-construction sales; another five received a “D.”

The decline in housing starts will likely lead to a drop of thousands of construction jobs, the study said. The decline in pre-construction sales, meanwhile, is “a clear indication that Ontario’s housing situation will get worse before it gets better, and that market weakness is not isolated to the condo market,” the report went on.

Prior to his election, Prime Minister Mark Carney pledged to double homebuilding in the Great White North to 500,000 units per year over the next decade. Carney also committed to create a new federal agency to speed up construction, known as Build Canada Homes. The agency launched earlier this month with a focus on affordable and middle-class housing.

To streamline development, the Ontario government has also announced new measures and funding to get shovels in the ground. Still, some economists and researchers aren’t confident that building targets will be reached, according to Yahoo.

Indeed, the Ontario government outlined goals three years ago, which make these latest numbers even more concerning. Toronto was 67 percent below its set goal in the first half of this year, while nearby Mississauga was down 71 percent and Brampton 92 percent behind.

The ongoing tariff war with the United States could complicate construction costs — and thus, starts — even further.

— Chris Malone Méndez