A new housing report for the Greater Toronto Area and Greater Golden Horseshoe showed an even bleaker outlook for Ontario’s construction activity and jobs than earlier this year.
The study, prepared by the University of Ottawa’s Missing Middle Initiative for the Residential Construction Council of Ontario (RESCON), found that housing starts across 34 municipalities fell 34% in the first nine months of 2025 compared with the same period from 2021 to 2024, with condo starts down 51%.
Purpose-built rental was the rare bright spot, with starts up 42% over the same benchmark.
Researchers graded municipalities on five indicators covering starts and pre-construction sales. Seventeen of the 34 municipalities received an F, nine received a D and only eight earned a C or better (Milton, Newmarket, Richmind Hill, Brantford, Burlington, Kitchener, Waterloo, and Welland).
This was a slight improvement from RESCON’s Q2 analysis, when 22 municipalities failed, but one the authors expected to reverse as lagging-start data caught up.
The report also estimated that weaker construction activity translated into 35,377 fewer person-years of employment over the period, up from 24,195 in job losses outlined in the mid-year report.
“The findings of this report are alarming but confirm what the residential construction industry and our builders have been experiencing and saying for some time now,” RESCON president Richard Lyall said.
“We are staring into the abyss. The new home market has tanked. It is a particularly dark time for those who work in residential construction. There have been significant job losses across the board. Projects are being shelved, and this will have a significant trickle-down effect on Ontario’s economy. We must act quicky to stem the bleeding.”
Mike Moffatt, economist and founder of the Missing Middle Initiative, said the latest results showed that “the negative trend in employment has continued and there is significantly less work in the residential construction sector.”
He added that “the person-years of employment in the industry are down which shows the effect that the lack of housing starts and sales is having on the industry and the economy.”
Broader pressures on builders
The Q3 report followed earlier work for RESCON that concluded most Ontario municipalities were already falling well short of provincial housing targets, with first-half 2025 starts across the region down around 40% on a four-year average.
Nationally, Canadian Mortgage and Housing Corporation data highlighted that total Canadian starts declined on both an annual and month‑over‑month basis in recent months.
In October, national housing starts dropped 17% from the previous month. The seasonally adjusted annualized rate (SAAR) fell to 232,765 units, well below economists’ forecasts of 265,000 and down from September’s revised 279,174 units.
Governments in Ottawa and Queen’s Park pledged to double housing starts, but Moffatt and other analysts warned that target looked remote without major policy changes.
RESCON reiterated its call for broad tax relief, arguing that “taxes, fees and levies account for 36 per cent of the cost of a new home” – a figure the organization said justified eliminating sales tax on all new units, not just first‑time buyer stock.
“This report is an eye-opener, as it notes we are trending in the wrong direction and the situation could get even worse,” Lyall said.
“Builders need to be able to build homes that people can afford. Steps must be taken to get the industry back on track. Our economy depends on it.”
Canada needs to build 3.2 million new homes over the next decade to restore affordability, the parliamentary budget officer warned. But the country isn’t keeping up—only about 227,000 new homes are expected each year until 2035, falling 65,000 short of the annual target.
CMP
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