Cracks have spidered across Ontario’s once-booming housing market, as the sound of hammers and saws fades to silence on construction sites from Barrie to London. What began as a slowdown has hardened into a standstill, leaving homebuyers and developers alike in a state of uneasy limbo.
Ontario’s housing minister Rob Flack did not mince words. At a recent event in London, he declared that new home construction had ground to a halt, raising doubts about the province’s pledge to deliver 1.5 million homes by 2031. The latest Canada Mortgage and Housing Corporation (CMHC) figures underline the severity: housing starts across Ontario fell by 25 per cent in July 2025 compared to the previous year, while most other provinces saw double-digit gains. Only British Columbia joined Ontario with a decline, though far less steep.
This abrupt freeze has sent ripples through the sector. According to a recent RBC report, Ontario’s market slump stands out as the most severe in Canada. Builders’ associations warn that dwindling sales are making it almost impossible to secure the financing needed to break ground on new projects. As one developer put it bluntly, “Potential new home buyers have hit the pause button.” The numbers bear this out. Municipalities have stepped up, issuing more development permits than ever before, but those approvals aren’t translating into shovels in the ground.
London mayor John Morgan highlighted the disconnect: city councils can speed up permits, but they cannot force investors or buyers to act. Meanwhile, the Ford government’s Building Faster Fund—designed to reward municipalities for housing starts—faces a rework, with Flack conceding that the current approach no longer reflects reality. The province has tinkered with development charges and approval processes, but with little effect so far.
Critics, like Liberal housing critic Adil Shamji, accuse the government of shifting responsibility, urging more direct action. The causes, however, stretch beyond Queen’s Park. Interest rates, construction costs, and federal incentives all play a role, leaving Ontario’s housing ambitions at the mercy of factors outside provincial control. As Flack put it, answers are needed fast, or the standstill may become the new normal.
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Home construction in Ontario is at a ‘standstill,’ housing minister says
