The Decline of New Home Sales in the Greater Toronto Area: An Urgent Industry Snapshot

Introduction

The Greater Toronto Area (GTA) is known for its vibrant real estate market, but recent industry reports signal troubling times ahead. New home sales have plummeted to record lows, posing a serious threat to tens of thousands of jobs in the construction industry and impacting the province’s long-term housing supply targets.

A Significant Drop in Sales

In December, the GTA recorded only 240 new home sales, a staggering 1,100 units below the previous 10-year average for that month. Altus Group, which provides housing market intelligence for the Building Industry and Land Development Association (BILD), recently disclosed that 2025 marked the worst year for new home sales in the GTA over the last 45 years. With just 5,300 sales for the year, this figure stands at a shocking 81% decline compared to the 10-year average of 28,286 sales.

• Notably, December 2024 had set a record low for new home sales, yet the onset of 2025 exhibited a further 24% decrease. Such disheartening statistics indicate a persistent downturn in the real estate market that could have far-reaching implications.

The Factors Behind Buyer Hesitancy

Various factors contribute to this decline. Edward Jegg, a research manager at Altus Group, elaborated that geopolitical uncertainties and elevated prices are significant culprits. Furthermore, the Bank of Canada’s recent indication that the cycle of interest rate cuts has ended adds to potential buyers’ hesitancy.

Sales Breakdown

A closer look at the data reveals further insights:

• Of the 5,300 new homes sold in 2025, 3,247 were single-family homes, reflecting a 63% decrease from the 10-year average.
• Conversely, 2,067 condos were sold, which is even more alarming, showing a 89% dip from the long-term average.

Employment at Risk

The implications of low sales numbers extend beyond simple market statistics; they threaten the livelihoods of many. According to BILD’s Chief Operating Officer Justin Sherwood, the reduced sales are anticipated to lead to fewer housing starts. Without a significant rebound in the market, it is projected that 100,000 construction jobs could be lost. This figure accounts for half direct construction jobs and half jobs for industries and services closely supporting construction work.

Policy Responses and Recommendations

In response to the alarming trend, both the Ontario and federal governments recently proposed rebates on their portions of the harmonized sales tax for first-time buyers of new homes priced up to $1 million. Sherwood advocates for a broader removal of these taxes to facilitate an increase in sales, emphasizing that the proportion of first-time buyers in the new home market is relatively modest.

Ontario Premier Doug Ford has expressed his support for the measure, suggesting that removing these taxes could significantly invigorate the housing market. Yet, he acknowledges the need for cooperation from the federal government.

Political Skepticism

Opposition voices, such as Ontario Liberal housing critic Adil Shamji, have criticized Ford, expressing doubt over his capacity to sufficiently increase the housing supply. Shamji contends that any forthcoming proposals would merely serve to refurbish Ford’s image rather than address the underlying issues.

Previously, the Ford government had promised to construct 1.5 million homes by 2031, but as housing starts have lagged, the target has become increasingly viewed as a "soft" goal. Current data indicates that Ontario experienced about 62,000 housing starts in 2025, representing a 13% decline from the previous year.

Conclusion

The alarming statistics released by BILD suggest a turbulent period ahead for Toronto’s real estate market. With new home sales plummeting to historic lows, the potential job losses in the construction industry underscore the urgent need for effective policy responses. The collaboration between provincial and federal authorities is not only crucial for reviving the construction sector but also essential for ensuring adequate housing supply in the long run. The stakes are high, and only decisive action can address the pressing challenges facing the GTA’s real estate environment.