Toronto Is Quietly Entering a Housing Drought
Toronto’s housing market isn’t just cooling, it’s quietly laying the groundwork for a major supply crisis by the end of this decade. While prices have dipped and construction has slowed, a massive shortage is on the horizon. In this post, we’ll explore the reasons behind the pre-construction slowdown, the political and economic forces at play, and what it means for Toronto buyers, sellers, and investors in the years ahead.
Pre-Construction Slows to a Crawl
According to recent data, new condo sales in Toronto are down 86% year-over-year. Cities across Canada are seeing similar numbers: Vancouver (-55%), Montreal (-62%), and Kitchener-Waterloo (-84%). Developers like Mattamy Homes and Great Gulf have started cutting jobs and postponing projects. (SOURCE: Globe and Mail)
Why Are Developers Stopping?
- Investor Demand Has Vanished:
CMHC reports that most condos were built for investors, not end users. With foreign buyer bans and high carrying costs, and dropping rental rates, investors are out. - Cost Pressures Are Sky High:
Land, development charges, construction materials, and labour have driven the average new build cost up. - Policy Paralysis:
Despite all levels of government stating we have a housing shortage, new construction is being throttled by regulation, taxes, and a lack of coordination.
What Happens If This Trend Continues?
If builders stop building and demand continues to grow – Toronto will be short tens of thousands of homes by 2029.
- CMHC projects it would now take 58 months to sell existing condo inventory.
- Construction timelines have stretched from 7 years to 9+.
- We’re sowing the seeds of the next housing crisis, with skyrocketing prices and limited inventory down the road.
What Buyers, Sellers & Investors Should Do Now
Buyers:
→ Take advantage of today’s prices. Lower competition, more choice.
Sellers:
→ Price strategically. Don’t wait for another “boom” – you might miss your window.
Investors:
→ Watch supply data. Low completions + growing population = future rental goldmine.
A Quiet Crisis With Loud Consequences
The real estate headlines in 2025 might focus on interest rates and affordability – but the real story is what isn’t being built. With fewer homes under construction today, Toronto is heading toward a housing drought that will leave buyers priced out and sellers scrambling to catch up. If you’re thinking about making a move, now is the time to get educated, act smart, and plan ahead.
