Toronto’s Housing Crisis Deepens: Starts Plunge 58% in 2025

UPDATE: Toronto’s housing market is in crisis mode as a devastating new report reveals a staggering 58% decline in housing starts for the first half of 2025. The alarming findings from the University of Ottawa’s Missing Middle Initiative, commissioned by the Residential Construction Council of Ontario (RESCON), indicate that 22 of the 34 municipalities in the Greater Golden Horseshoe area have received failing grades.

The report highlights a shocking 40% drop in overall housing starts across the municipalities studied, with condo apartment construction plummeting 54%. Toronto has been hit hardest, with condo starts down by an eye-watering 80%, dropping from an average of nearly 8,000 units over the past four years to just 1,606 in 2025.

“This should set off alarm bells for policymakers at all levels of government,” said RESCON President Richard Lyall in a recent news release. The report underscores that Toronto is now 67% behind its provincial housing targets, amounting to a shortfall of nearly 10,000 units. This slowdown has resulted in an estimated loss of 10,209 construction jobs in Toronto alone, contributing to a wider decline of 24,195 jobs across the Greater Golden Horseshoe region.

Lyall further emphasized, “Housing projects have been shelved, and the industry has hit a wall. The outlook is bleak, and we are trending in the wrong direction. We need governments to take concrete action to lower the tax burden and modernize the process to kick-start the industry.”

In this troubling report, only seven municipalities scored a grade of C or higher, while 22 municipalities, including Toronto, received a failing grade of F. Notably, Milton and Brantford were the only municipalities to achieve an A or better. The findings are compounded by another report from the Canadian Mortgage and Housing Corporation (CMHC) indicating that Toronto is the “epicenter of weakness” for residential construction, on pace for the lowest annual housing starts total in 30 years.

The report reveals a sharp decrease in pre-construction sales, with condo apartments down by a staggering 89% and ground-oriented sales down by 70%. “This is a clear indication that Ontario’s housing situation will get worse before it gets better,” the researchers state.

As the situation continues to worsen, Mike Moffatt, an economist and founder of the Missing Middle Initiative, calls for urgent action: “Both the federal and provincial governments have committed to doubling housing starts. Unfortunately, housing starts are falling, and new home sales show that further declines are about to come. All three orders of government must act to address the housing crisis.”

Residents and prospective homebuyers are left anxious and frustrated as the industry stagnates, and the urgent need for housing solutions grows increasingly critical. The report serves as a wake-up call for all stakeholders involved in the housing sector.

As the situation develops, observers will be watching closely for government responses and potential measures to revive the ailing housing market. The urgency for action could not be clearer, as the future of Toronto’s housing landscape hangs in the balance.