New report indicates already-dire housing situation could get even worse
Vaughan, Ont., Dec. 01, 2025 (GLOBE NEWSWIRE) -- Given current and anticipated conditions, the already-dire state of new home starts and sales across municipalities in the Greater Toronto Area (GTA) and Greater Golden Horseshoe (GGH) is going to get worse before it gets better, according to a comprehensive new report done for the Residential Construction Council of Ontario (RESCON).
The analysis reveals that housing starts in the first nine months of 2025 are down substantially from the same period in the previous three years, while industry job losses continue to grow.
“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,” says RESCON president Richard Lyall. “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.”
The report was done by the Missing Middle Initiative at the University of Ottawa. The assessment is based on data obtained from Canada Mortgage and Housing Corporation and Altus Group.
It is the second report commissioned by RESCON that examines the state of the housing crisis. The first was an analysis released in September that looked at the first six months of 2025. The new report looks at the first nine months of this year. In both reports, researchers examined 34 municipalities across nine separate metro areas in the GTA and GGH and assessed the state of housing sales and construction, and the effects on industry employment.
The recent analysis shows that housing starts were down 34 per cent in the municipalities over the first three quarters of 2025, relative to the January-to-September periods in 2021-24. Condo apartment starts were down 51 per cent in 2025 relative to the same earlier time periods. On the positive side, purpose-built rental starts were up 42 per cent over the same periods.
The new report also graded the municipalities in five categories related to housing starts and sales. Of the 34 municipalities, 17 received an F, nine received a D, and eight other municipalities received a C or higher. Although average grades have improved slightly from the earlier report when 22 received an F, researchers anticipate average grades to fall in future reports.
The decline in housing starts is resulting in significant job losses. The analysis estimates that the reduction in housing starts over the first nine months of this year translates into 35,377 fewer person-years of employment, compared to the same period in the previous three years.
“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,” says Mike Moffatt, an economist and founder of the Missing Middle Initiative. “The negative trend in employment has continued and there is significantly less work in the residential construction sector.”
The research comes at a particularly important time. Both the federal and Ontario governments have committed to significantly raising housing starts but their targets seem out of reach.
The tax burden is a big part of the problem. Taxes, fees and levies account for 36 per cent of the cost of a new home. So, on a $1-million home, $360,000 of the price tag is due to taxes. RESCON has called on the federal and provincial governments to eliminate the sales taxes on all new homes - in addition to the steps they have taken to eliminate the taxes for first-time buyers.
“This report is an eye-opener, as it notes we are trending in the wrong direction and the situation could get even worse,” says Lyall. “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.”
Click here to read the report.
RESCON is the province’s leading association of residential builders committed to providing leadership and fostering innovation in the industry.
The Missing Middle Initiative produces research, a Substack newsletter and thought pieces, videos and a podcast on the barriers preventing young Canadians and new families from entering the middle class.
Grant Cameron RESCON 905-638-1706 cameron@rescon.com
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