Toronto’s housing affordability crisis is being tested by record population growth, with nearly 300,000 newcomers arriving last year alone—fuelling demand that continues to outpace construction and strain public policy.
According to the 2025 Global Cities Index by Oxford Economics, Toronto ranks among the least affordable cities worldwide, with residents spending a larger share of their income on housing than those in nearly every other major city.
CTV News reports that despite recent federal initiatives—such as removing the goods and services tax (GST) on first-time home purchases under $1 million—critics argue the core challenges remain unresolved.
Average home prices in the Toronto area declined by 4% in May compared to the same period last year, yet still exceeded $1.1 million, based on data from the Toronto Region Real Estate Board (TRREB).
Mayor Olivia Chow said in a press briefing last week that Toronto’s population has grown by 35% over the past 20 years, while the supply of affordable homes has not kept up.
“The result? Life is getting too expensive for families,” said Chow. “Young people are giving up on the dream of home ownership.”
To address rising costs, the city offers a program that defers development fees for projects where at least 20% of units are considered affordable. However, Chow noted that funding has not kept pace with developer interest. She said that about 300,000 units across 70 development projects are “shovel-ready” but remain idle, awaiting financial support from other levels of government.
CTV News also cited Frank Clayton, senior research fellow at Toronto Metropolitan University, who noted that development fees in the city can add more than $100,000 to the cost of a new home, and in some parts of the Greater Toronto Area, that figure can reach $200,000. He said developers need to recover those costs through home prices, making new construction financially unfeasible in many cases.
Clayton identified high fees, restrictive zoning, and sustained demand—driven in part by immigration—as the primary contributors to the affordability issue. He added that planning systems have not adapted to market shifts, limiting the number of zoned and serviced sites available for housing.
“You need sites that are zoned, and you need sites that are serviced,” Clayton said. “The planning system is very unresponsive to changes in demand.”
New home sales in the GTA hit a seventh consecutive record low in April, according to CTV News. Dave Wilkes, president and CEO of the Building Industry and Land Development Association, called for an update to the harmonized sales tax formula, which has remained unchanged since 1991.
“The longer we wait, the longer that it’s going to take to balance supply and demand,” Wilkes said.
CMP
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