Two years after the Ford government pledged to construct 1.5 million new homes within a decade to address Ontario’s housing crisis, indicators reveal that home construction is dwindling significantly.
The number of housing starts in the first half of 2024 has fallen behind the previous year, with June witnessing a dramatic 44 percent year-on-year drop. Concurrently, new home sales — an indicator of future home construction — are also on the decline.
According to the Canadian Mortgage and Housing Corporation (CMHC), between January and June, 36,371 new homes were initiated in Ontario areas with populations over 10,000. This marks a 14 percent decrease from the previous year.
The CMHC reported particularly alarming figures last month. In June 2023, 10,114 new homes were started in Ontario; this year, that number plunged to 5,681.
“Doug Ford may like to wear a hard hat and hold a shovel, but he certainly is no homebuilder,” Ontario Liberal housing critic Adil Shamji commented, referencing several housing laws passed by the current government. “What do we have to show for it? We certainly don’t have more homes. In fact, this data shows that we’re building less — it’s damning.”
Since the 2022 election, the Ford government has concentrated its efforts on a plan to resolve Ontario’s housing crisis by building 1.5 million new homes by 2031. This ambitious goal necessitates an average of 150,000 new housing starts each year, with expectations of increased numbers in later years.
Last year, Ontario set a target of 110,000 new housing starts. Including long-term care beds and basement units in the CMHC’s data, the province claimed it had achieved 99 percent of that goal.
However, expectations of meeting future targets are diminishing, according to a building industry specialist.
Declining new home sales this year are causing serious concern among developers, who depend on future purchases to secure funding for new projects.
“Today’s sales are tomorrow’s housing starts — so we’re really going to see a dearth of supply in the market in two to three years when normally you’d see the construction happening for the sales that have taken place right now,” David Wilkes, BILD president and CEO, told Global News. “We’ve seen historic lows in sales of new homes in the GTA… As I talk to the members that have been in the industry, this is really quite an unsettling time.”
Wilkes cited several factors contributing to the slowdown in home sales, including high interest rates and persistent costs associated with building housing, such as labor, land, taxes, and fees.