VAUGHAN, ONT. — The future is not looking bright for housing starts in Ontario, a new report from the Residential Construction Council of Ontario (RESCON) finds.
Starts over the next few years will likely weaken and the already-dire supply shortage could get even worse, a release states, adding employment in new residential construction has peaked and will probably fall substantially in the years ahead, adding to the challenge.
The report, titled Housing Market Outlooks in Ontario, was prepared for RESCON by a Toronto-based economic research firm led by Will Dunning.
It develops forecasts covering 2024 to 2028 for Ontario, as well as municipalities in the Census Metropolitan Areas of Toronto, Hamilton and Oshawa.
The report provides two sets of scenarios. In both, a further weakening of employment and new housing starts continues well into 2025, followed by a slow recovery of the economy and housing activity during 2026 to 2028. By the end of 2028, conditions will not have fully recovered, the release reads.
In the GTA, the average municipal charge for new homes is $164,920 – about $42,000 higher than in 2022, RESCON points out. For apartments, the current figure is $122,387, which is about $32,000 higher than in 2022.
“The costs of delays in approvals varies by municipality within the GTA from $2,672 to $5,576 per month,” the report states. “When applied to the typical delay period, it can add $43,000 to $90,000 per unit.”
The report notes affordability needs to be returned to prior levels through interest rate decreases and a reduction in government-imposed costs and land prices.
“With a critical need for new housing, it is imperative that all levels of government take immediate action to boost construction by lowering the taxes, fees and levies and reducing the red tape and bureaucracy which slows the industry and adds to the cost of housing,” explains RESCON president Richard Lyall in a statement.
“To spur the market, we need conditions that allow builders to build houses that people can afford. Otherwise, we may be in dire straits as new home construction stalls and unemployment in the industry rises.
“Governments have made some inroads and the recent plan floated by the federal Conservatives to remove the sales taxes on new housing sold for under $1 million is a good start. We hope the province follows suit, and we need to reduce the bureaucracy associated with getting new homes built. If we don’t take these steps the consequences could be catastrophic for our industry and the economy.”
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