Government urged to act as new home sales plummet in Toronto and beyond

New home sales in the Greater Toronto Area (GTA) dropped to their lowest point in decades this August, causing industry leaders to warn that, unless the government steps in quickly, the GTA and other major Canadian markets could face a serious housing downturn with wide economic impacts.

On average, August usually saw 1,595 new home sales in the GTA over the past decade. However, according to Altus Group, there were only 300 new home sales in the GTA in August. This is a 42% drop from the same month last year and 81% below the 10-year average.

“GTA new home sales in August 2025 remained at rock bottom levels. New launches, in particular high-rise projects, over the past 12 months have been at a record low and at the same time, completions have reached a record high,” Edward Jegg, research manager at Altus Group, said.

“As further projects reach completion, new home tradespeople are becoming increasingly at risk of not being able to find employment and therefore joining the growing number of Canadians without work, putting additional strain on the economy.”

Condo and single-family sales continue to slide

Condominium apartment sales, including units in low, medium, and high-rise buildings as well as stacked townhouses, totaled just 118 in August, down 59% year over year and 90% below the 10-year average.

Single-family home sales fared only marginally better, with 182 units sold, a 21% decline from last August and 59% below the decade average.

Inventory levels, meanwhile, have soared. The GTA’s remaining new home inventory stood at 22,245 units at the end of August, representing a 20-month supply based on the past year’s sales pace—the highest on record.

“With pre-construction inventory dropping dramatically, the signs are clear that the new residential sector in the GTA is basically stopping,” Justin Sherwood, senior vice president of communications, research, and stakeholder relations at BILD, said.

“Greater Vancouver is seeing a third of its normal activity and will be soon in a similar place, many other Ontario markets like Ottawa and the Kitchener-Waterloo area are struggling, and we are now seeing even some troubling signs in Calgary. Why is the government ignoring these obvious warning signs?”

Sherwood added that reaching the federal government’s target of 500,000 new homes per year now appears out of reach. In fact, it may be difficult to keep annual housing starts above 200,000 in the coming years.

If nothing changes, layoffs and a shortage of new homes will hit construction workers and families looking to buy between 2027 and 2031 the hardest.

BILD continues to call for the federal and provincial governments to temporarily suspend GST on new homes under $1 million, speed up provincial development charge reforms, and push municipalities to lower the fees and charges on new homes.

Broader market pressures and cautious optimism

The GTA’s struggles mirror trends in other major Canadian markets. According to a new report from the University of Ottawa’s Missing Middle Initiative for the Residential Construction Council of Ontario (RESCON), 22 out of 34 municipalities reviewed received an F for their performance on housing starts and sales. The City of Toronto fared even worse, with starts down 58% and sales plummeting 91%.

Meanwhile, national home sales jumped for the fifth month in a row in August, eking out a 1.1% increase from July as a slow national recovery continued, according to the Canadian Real Estate Association (CREA).

Industry experts have pointed to a combination of high interest rates, persistent affordability challenges, and regulatory hurdles as key contributors to the slowdown.

Benchmark prices for new homes have also shifted. The average price for new condominium apartments in the GTA held steady at $1,028,782, while new single-family homes averaged $1,462,342, down 8.5% over the past year.

Even with these challenges, most real estate agents in the US and Canada stayed positive about the market’s future, according to The Real Brokerage’s August 2025 Agent Survey. The Agent Optimism Index dropped slightly to 64.2 in August from 67.2 in July, but stayed well above the 50-point mark that signals confidence.

CMP

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