The Greater Toronto Area (GTA) has witnessed a stark decline in new home sales, with only 269 properties sold in January, according to a recent report from the Building Industry and Land Development Association (BILD) and its research partner, Altus Group. This figure marks a significant 36 per cent decrease compared to the same month last year and is a staggering 80 per cent below the average sales rate observed over the past decade.
Inventory Levels Remain High
Despite the drop in sales, the inventory of new homes in the GTA remains substantial, with 20,557 units available as of January. This includes a mix of 14,731 condominium apartments and 5,826 single-family homes. The report highlights that the current inventory represents approximately 26 months of supply, based on the average sales from the past year, the highest level recorded to date.
Justin Sherwood, BILD’s Chief Operating Officer, emphasised the need for market stability. “To reverse these trends, we require certainty in the market along with initiatives that bolster consumer confidence to encourage buyers to re-enter the market,” he stated in a press release. Sherwood warned that without proactive measures, the region could face prolonged low sales figures, which would adversely affect employment and the broader economy, ultimately stifling future development.
Breakdown of Sales
In terms of property types, the report revealed that condominiums, including low, medium, and high-rise units as well as stacked townhouses, accounted for only 85 of the sales in January. Meanwhile, single-family homes saw a total of 184 transactions. The stark contrast in sales highlights the ongoing challenges facing both segments of the housing market, with many potential buyers remaining on the sidelines due to uncertainty.
Government Action and Industry Response
BILD has advocated for immediate governmental action to stimulate market activity. Sherwood suggested that the federal government should expedite its plans to reduce development charges and provide clarity on taxation measures. “It is crucial that governments act quickly and decisively to rebuild consumer confidence and reinvigorate market activity through policies that mitigate government-imposed costs on new homes,” he urged.
In a glimmer of hope, Ontario’s homebuilding sector did show some signs of recovery in January, with a reported 12 per cent increase in new housing starts compared to the same period in 2025. The Canada Mortgage and Housing Corporation noted that 550 single-detached homes commenced construction, a sign that the oversupply of homes may be prompting a shift towards more multi-residential developments, primarily rentals.
Challenges Ahead
Premier Doug Ford has faced criticism for the housing sector’s struggles, having initially blamed rising interest rates for the slump. Even as borrowing costs have decreased, the anticipated recovery in housing sales has not materialised. Ford has since pointed to the burdens of building approvals and municipal permit fees as significant obstacles, suggesting that his administration’s efforts to streamline regulations have yet to yield positive results.
One recent initiative includes a new tax incentive for first-time buyers aimed at stimulating demand. However, Ford himself acknowledged its limitations, indicating that further expansion of the programme may be necessary.
Why it Matters
The current stagnation in Toronto’s housing market poses a significant challenge for the region’s economic landscape. As new home sales dwindle to historic lows, the implications ripple through employment sectors reliant on residential construction and development. If the government does not take swift action to restore confidence among buyers and mitigate costs associated with new home purchases, the ongoing slump could hinder both current economic growth and future housing supply, exacerbating the already pressing affordability crisis facing many in the GTA.
