Housing starts across Southern Ontario are slowing in 2025, creating a tighter future supply pipeline that could directly affect 2026 homebuyers. With builders delaying projects, condominium starts dropping sharply, and financing conditions remaining challenging, understanding this shift is essential for anyone planning to purchase next year [1][2].

Housing Starts Are Sliding in Key Southern Ontario Markets

According to the Canada Mortgage and Housing Corporation (CMHC), housing starts in centres with populations over 10,000 declined to 19,174 units in October 2025, down from 19,763 the year prior. This reinforces an ongoing downward trend affecting both urban and suburban regions of Southern Ontario [2].

In the GTA — the largest driver of provincial housing activity — the slowdown is even more pronounced. CMHC data shows that new condo projects are starting at one of their slowest paces in decades, with developers citing high construction costs, low investor demand, and difficulty securing pre-sales needed to launch projects [3]. Toronto’s per-capita condo starts are now on track to reach their lowest point in nearly 30 years.

Despite this, ground-oriented housing (detached, semi-detached, and townhomes) saw a modest lift in early 2025. These increases, however, were not enough to offset the steep decline in multi-unit residential starts, which typically make up the bulk of new housing supply in Ontario’s high-density regions [1].

Why Southern Ontario Builders Are Slowing Down

The drop in housing starts is tied to several structural and economic forces impacting developers and municipalities across Southern Ontario. Here are the core drivers behind the slowdown:

• Weak builder confidence: The Canadian Home Builders’ Association reports builder sentiment sitting near record lows, with both single-family and multi-family confidence indexes below 30 points. Developers are cautious, delaying launches until conditions improve [4].
• High construction and labour costs: Material inflation, skilled-labour shortages, and elevated financing costs have pushed project budgets higher than many developers can justify [3].
• Condo pre-sales are collapsing: With fewer investors buying pre-construction units, many condo projects are failing to meet lender pre-sale requirements and are postponed or canceled [2].
• Regulatory hurdles: Long approvals, development charges, and zoning delays continue to slow the ability of builders to bring new product to market [4].
• Shift toward rental development: Many builders are now prioritizing purpose-built rentals over ownership condos due to steadier long-term returns [1].

How This Impacts 2026 Homebuyers

Fewer new builds today mean tighter supply tomorrow. For buyers planning to enter the market in 2026, the slowdown in Southern Ontario housing starts signals several important shifts to prepare for:

• Reduced supply may support prices: If demand recovers in 2026 — especially with potential rate cuts — limited new inventory could prevent prices from dropping further, particularly in key urban markets [1].
• Less condo availability: With condo starts at multi-year lows, future supply will be restricted, impacting affordability for first-time buyers.
• Increased pressure on the resale market: As new supply slows, more buyers will compete for existing homes, especially townhomes and entry-level detached properties.
• Potential delays in pre-construction handovers: Buyers with 2024–2025 pre-construction contracts should anticipate extended timelines due to construction slowdowns.
• Higher demand for ground-oriented homes: With low-rise construction holding steadier than condo construction, competition for these homes may rise in 2026.

What Buyers Should Do Now If They’re Planning for 2026

With Southern Ontario housing starts dropping, buyers targeting 2026 should take a strategic approach. Here’s how to protect your budget and position yourself ahead of the market:

• Explore resale options now: Early planning gives you flexibility and helps you understand which areas have healthier inventory levels.
• Monitor pre-construction incentives: Developers facing slower sales may offer incentives, upgrades, or assignment flexibility.
• Speak with a mortgage advisor earlier than usual: Rate environment shifts could create windows of opportunity.
• Consider ground-oriented housing: Detached, semis, and townhomes may hold value better than condos if supply remains tight.
• Track municipal approvals: Policy changes or development-charge reforms may accelerate new supply in your target region.

FAQs: Southern Ontario Housing Starts

1. Why are housing starts declining in Southern Ontario?
   High construction costs, weak builder confidence, low condo investor demand, and lengthy municipal approvals are major contributors [4].
2. Does this mean home prices will rise in 2026?
   Limited new supply may stabilize or increase prices, but broader economic factors will also influence the market.
3. Are condos still a good option?
   Yes — but inventory will be tighter. Buyers should be careful with pre-construction timelines.
4. Will new policies help increase construction?
   The province is working on measures to accelerate builds, but results may take time to appear [3].
5. Should I wait until 2026 to buy?
   If affordability improves with rate cuts, demand may spike. Buyers planning ahead may benefit from moving earlier.

Sources:

1. CMHC – Housing Supply Reports
2. Canadian Mortgage Trends – Housing Starts Updates 2025
3. CMHC – Market Data & Research
4. Canadian Home Builders’ Association – Market Index

Sanjeevan

CTMO

Sanjeevan Premkumar is the Chief Technology & Marketing Officer at Bridge, specializing in digital strategy and real estate market research. He combines technical insight with a deep understanding of the property sector.

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