Full Breakdown
Ontario's Housing Market Faces Historic Decline and Job Risks
1/23/2026, 6:55:21 AM
Record Low New Home Sales in Ontario
The Greater Toronto Area (GTA) is experiencing an unprecedented downturn in its housing market, with new home sales plummeting to a 45-year low. In 2025, only 5,300 new homes were sold, a staggering 82% below the 10-year average of 1,327 units for December, according to the Building Industry and Land Development Association (BILD) and data from Altus Group. This decline has raised alarms about potential job losses, with estimates suggesting that up to 100,000 jobs in Ontario's construction sector could be at risk if the market does not recover.
Economic Implications and Job Risks
Justin Sherwood, Chief Operating Officer at BILD, emphasized the critical nature of the situation, likening it to historical downturns in the housing market. The construction sector, which typically supports over 220,000 jobs, has seen its contribution to Ontario's economy drop from nearly 10% at its peak to below 7% as the market stagnates. Experts warn that without significant intervention, the economic repercussions could be severe, affecting not only employment but also the broader economy.
Factors Contributing to the Decline
Several factors have contributed to the current crisis in the housing market. Ongoing geopolitical concerns, high prices, and the Bank of Canada's indication that interest rate cuts are unlikely have all impacted buyer behavior. The average price for new single-family homes is now approximately $1.4 million, while new condos average around $1.02 million. Additionally, there has been a record cancellation of condo projects, with 28 projects and 7,243 units canceled in 2025.
Calls for Government Intervention
Industry leaders are advocating for urgent policy changes to stimulate the housing market. Proposed measures include the elimination of the Harmonized Sales Tax (HST) on new homes and a reduction in development charges, which could significantly lower construction costs. These changes are seen as essential to reviving buyer interest and stabilizing the market.
Criticism and Opposition
Despite the calls for intervention, some economists argue that the current downturn is a necessary correction following the rapid price increases seen in the post-pandemic period. Douglas Porter from BMO suggests that returning to a more sustainable level of affordability is crucial for long-term growth in the housing market.
Future Outlook
Looking ahead, the outlook for the Ontario housing market remains bleak. Ron Butler, an Ontario-based mortgage broker, stated, “The one thing for sure is that it’s going to get worse in Ontario. There is no possibility of better.” Meanwhile, Victor Couture, an associate professor at the University of Toronto, noted that while home prices are likely to continue declining, predicting the extent of this decline is challenging.
Verbatim Quotes
- “New home sales are down well into the double digits across the province, putting 100,000 jobs at risk in Ontario alone,” — Justin Sherwood, Chief Operating Officer, BILD
- “Thinking otherwise, it’s entirely based on hopium.” — Ron Butler, Ontario-based mortgage broker
- “If you think of a home as an investment, you may have wait a long time before houses are again a good investment in Canada, but if you think of a home as somewhere to live and you expect to stay in the house five to 10 years then it’s a better time now than its been in many years,” — Victor Couture, Associate Professor, University of Toronto
As the situation evolves, the focus remains on finding effective solutions to revive the housing market and protect jobs in Ontario.
