With housing starts plunging to their lowest level since 1996, builders across the Greater Toronto Area (GTA) are warning of massive job losses and stalled development that could reshape the city’s skyline for years to come.
Toronto Housing Starts Hit Record Low
According to the Canada Mortgage and Housing Corporation (CMHC), residential building activity in Toronto fell 44% in the first half of 2025 compared to last year. Condominium construction has been hit the hardest, with a 60% drop in new condo starts and sales falling by 75% since 2022.
This slowdown has pushed Toronto’s homebuilding activity to its weakest point in nearly three decades—even after adjusting for population growth.
Builders Sound the Alarm on Job Losses
The Altus Group projects that if current trends continue, the GTA could lose 41,000 residential construction jobs by 2029. Skilled trades workers and project management teams are already being cut as developers struggle to launch new projects.
Richard Lyall, president of the Residential Construction Council of Ontario, warned:
“The high-rise business in 2026 to 2028 is going to be very ugly. Thousands of trades and construction staff are already being laid off.”
With fewer projects breaking ground, many skilled workers are expected to leave the industry or move to other provinces—creating a future labour shortage once demand eventually returns.
Why Toronto’s Condo Market Has Collapsed
Several forces have collided to trigger Toronto’s condo slowdown:
- High interest rates making borrowing more expensive
- Soaring development charges and construction costs
- Declining investor confidence in pre-construction sales
- Rising resale inventory putting pressure on pricing
Currently, fewer than 30% of new condo listings are selling each month, far below the 40–60% needed to keep projects viable. This imbalance is driving cancellations, delays, and even permanent project shutdowns.
Can Government Policies Save the Market?
Federal and provincial governments have taken steps, such as:
- Eliminating GST for first-time buyers of homes under $1M
- Offering tax breaks on homes up to $1.5M
- Launching Build Canada Homes, a $13B fund to build affordable housing on public land
But industry leaders argue these measures don’t go far enough. Lyall insists that governments must cut development charges, align zoning policies, and fast-track permit approvals. He notes that 36% of a new home’s price comes from taxes, fees, and levies, making affordability nearly impossible for most buyers.
What Happens If Nothing Changes?
If housing starts remain stalled, the GTA faces a double blow:
- Short-term job losses as projects dry up
- Future housing shortages when demand rebounds but skilled workers have already left the sector
As Lyall put it:
“If the gap is too big, we won’t have the workforce when we finally need it. That’s the next crisis we’re creating.”
The Bottom Line for Buyers and Investors
Toronto’s housing slowdown isn’t just about fewer cranes in the sky—it’s about affordability, jobs, and the long-term stability of Canada’s largest housing market.
Unless governments, municipalities, and builders align on solutions like tax relief, zoning reform, and faster approvals, Toronto risks deepening its housing crisis for both homebuyers and workers.
👉 At Lendworth, we believe smart lending solutions and innovative investment strategies can help bridge the gap in today’s uncertain housing market. Whether you’re a homebuyer, investor, or developer, we’re here to guide you through the shifts in Canada’s real estate landscape.