Canada’s politicians spent billions in taxpayer resources to stimulate new homebuilding, and the exact opposite is happening. Canada Mortgage and Housing Corporation (CMHC) data shows a sharp decline in housing starts for March. The problem is easy to attribute to tariffs, but it wouldn’t make sense in this context—especially as provinces like Alberta continue to hit near-record levels of housing starts. The decline is primarily due to a collapse in Ontario, where weak demand has led to the fewest new housing starts since the 2009 Global Financial Crisis.
Canadian Housing Starts Are Grinding Lower As Ontario Real Estate Demand Collapses
Despite politicians across the country taking credit for boosting housing, new housing has plunged. The seasonally adjusted annual rate (SAAR) of housing starts fell to 214.2k units in March, a decline of 3.3% from a month before, extending the slowing trend that began in November. The problem is seriously amplified in Ontario.
“Most notable is the crumbling of activity in Ontario, where starts fell to 39k annualized in March, just about matching levels last seen during the depths of the 2009 recession,” warns Robert Kavcic, senior economist at BMO.
Ontario Housing Starts Collapses As Residents Flee, Alberta Nears Record High As Canadians Migrate
The country’s largest (& most expensive) province has seen housing demand completely collapse. Ontario new home starts fell 32% to 39k units in March, a trend likely to be attributed to the trade war. However, housing starts generally begin at least a year after projects are sold, and they have been steadily declining since peaking in 2022. The province is now seeing the fewest units begin construction since the Global Financial Crisis.
Source: BMO Capital Markets; CMHC; Haver Analytics.
“While starts can be a bit of a weather report, this is more evidence that tough conditions in the province are here to stay. Condo investors have vanished; a full pipeline of completions is still coming; and pre-sales/starts have therefore fallen off sharply,” explains Kavcic.
Not all provinces are seeing a collapse. In fact, some have seen starts launch to near-record highs, further emphasizing the issue isn’t entirely tariff-related.
“Notably, activity in Alberta is holding up much better, and is in fact near record levels. There was less froth in that market, and population growth should hold up better,” he says.
The bank believes that non-permanent resident caps will impact provinces like Alberta less. At the same time, they see interprovincial migration acting in the province’s favor, as more people flow from Ontario to Alberta.
“Suffice it to say that seeing new starts in Ontario run below those in Alberta (as we saw in March) is extremely rare given that Ontario has more than 3x the population,” notes Kavcic.
The more taxpayers subsidize builders the less they’ll build without greater subsidies.
It’s a distribution scheme with Carney now advocating taxpayers pay to build rentals for institutions to own and generate yield (payments). Good news for us who own a home but the window to own will shrink.
Doug, Carney, Pierre, etc. all promising to build 500k homes per year but I do PM at a major developer and we can’t even secure materials at a reasonable price. Now you want to nearly triple the amount of materials needed and somehow prices will fall? Gotta be kidding.
We just aren’t building unless it makes sense. Either the market corrects or the gov pays the inflated price, but no developer will intentionally build at a loss.
Why would anyone want to live in Ontario right now? Is it the crime? Expensive housing? The lack of jobs? LOL.
This is a recession being hidden by the junk methodology at Stats Can’t.
Once the harsh AB winters kick in many will regret moving there . Jobs attributed to oil are muted bc of Liberal policies. Entire economy is being held hostage by poor policies that are to the detriment of Canadians. This will either about face quickly, or end in a depression depending on the outcome April 28th. The existential threat is Not Trump and tariffs . The threat is from within our own borders. Before you vote, read the book Values.
Housing is collapsing because we’ve reach a point where pretty much no one, except the rich, that is, can afford to buy.
What’s more, many mortgages are coming up for renewal, and consequently many who got in the market when they were ultra low, will not be able to cope with the massive increases that are expected due to increased mortgage lending rates.
Since 2008, the Government bought votes from Older Established Canadians by using every trick they could think of to inflate and reinflate House Prices.
Thanks to Bad Management, Canada has become a very cold third World Country.
Still building condos all over the GTA Not sure where the money is coming to pay for them Most jobs are low paying and there is high unemployment because of massive immigration levels combined with businesses running away from Ontaxario
Still seeing new houses being sold for 600k in the asshole of Niagara. I can only imagine what new houses in Etobicoke, Brampton, etc… cost.
Subsidies aren’t the answer for the long term, either.
As long as it’s huge developers looking for a large ROI who secure the land, it will never be affordable.
I just saw a house for rent on Facebook marketplace. 7 bedrooms, renting each bedroom out for $800/each. This is typical now.
Also, stop putting capital gains taxes on people who sell their recreational homes. They aren’t part of the problem. That sector is not a necessity and is fairly economically agnostic.
When you have 69% of Canadians with incomes of $100,000 and less, the well-off are the only ones who can buy homes. And most of them already own the 3, 4, and 5 million $ houses they wanted.
There is little point in offering to cut the GST on houses up 1 Mil, you have to have an income of 130,000 to buy a $800,000 house.
How can people buy houses when the prices are more than what we can afford. Where is the money to pay for the houses. Everyone talking about house prices and supply and demand and tariffs.
None of those things matter when your wages stays the same and house prices double. That is where you guys need to look.
Oh no! You mean people on a 40k Starbucks barista salary can’t afford a “huge frontage 46 foot lot from the low 2.2s”? Can’t wait to be told how I now have to subsidize boomer retirement when their property values take a 40% haircut because of liberal price stimulating policies during COVID.
Yet, they still bring newcomers and temporary low wages people from a single country to further deepen the housing situation.
Greedy builders, red tape and enormous taxes equals to unaffordable homes . Capitulation will eventually prevail. It will take some time.
Ontario is turning into an Islamic state. Alberta will thrive, and likely split from Canada, if the Liberals are elected. If they do, I’ll move there as well. The usa will own Canada under a liberal government, as Trump hates Carnage and the Liberals. Save Canada, vote Conservative!
For the last decade,the liberal government created and allowed the housing crisis to go out of control.Now it s too little too late to fix it.Carney and the libs want Canadians to rent for life and own nothing.The last decade has made thousands of Canadians poorer and home ownership is still unaffordable. It s going to take a long time.