Canada Mortgage and Housing Corporation (CMHC) has released it’s report for April 2024 housing starts. New home construction in Ontario has hit a significant slowdown, with urban housing starts dropping by a staggering 37% compared to last year, reaching levels not seen since 2018. This downturn is largely attributed to rising interest rates, driving both buyers and developers to reassess their projects.
High mortgage costs are dampening demand from buyers, while also increasing financing expenses for developers. Numerous projects, including 60 in the Greater Toronto and Hamilton Area alone, have been indefinitely paused. Condominium sales in this region are at their lowest since 2009, exacerbating concerns about affordability and supply. The province is projected to see a 15% drop in housing starts for 2024, with multi-unit residential construction bearing the brunt of the decline. Proposed legislation, like Bill 185, which allows municipalities to immediately increase development charges, has sparked debate. Developers and economists are urging government intervention to alleviate construction costs.
The decline in housing starts is not confined to Toronto; other major urban centers like Ottawa and Hamilton are also experiencing significant drops. Smaller areas like Kitchener-Waterloo-Cambridge, London, and Windsor show some resilience, but the overall outlook for Ontario’s new home construction remains uncertain.
