A newly released report card on the state of housing in Ontario has delivered a stark assessment, highlighting a troubling decline in new home construction across much of southern Ontario during the first nine months of 2025. The city of Toronto, in particular, received a failing grade from the report's authors.
Sharp Decline in New Construction
The data shows that housing starts in the Greater Toronto Area and surrounding regions have fallen significantly when compared to previous periods. This downturn in new residential construction activity is a major contributor to the region's ongoing housing supply shortage. The report, which analyzes construction activity from January through September of 2025, points to a clear negative trend that threatens to exacerbate affordability issues.
The report card gave Toronto a failing grade specifically due to the declining number of new home construction starts. This evaluation underscores the growing gap between housing need and new supply in Canada's most populous city. The findings come amid persistent challenges related to construction costs, financing, and municipal approval processes.
Broader Impact Across Southern Ontario
While Toronto's situation is prominently highlighted, the report indicates that the slowdown is not confined to the city limits. Many communities throughout southern Ontario are experiencing similar reductions in housing start activity. This regional trend suggests systemic issues are at play, affecting the broader market's ability to deliver the homes needed for a growing population.
The decline recorded in the initial three quarters of 2025 sets a concerning precedent for the year's total housing output. Analysts warn that without a reversal of this trend, pressure on existing housing stock will continue to intensify, potentially driving prices and rents higher despite cooling demand in some segments.
Implications for Policy and Market
The report's failing grade for Toronto is likely to fuel further debate among municipal, provincial, and federal policymakers. All levels of government have pledged to accelerate housing construction, but this data indicates those efforts have yet to translate into increased groundbreakings in the region most acutely affected by the housing shortage.
The findings for the first nine months of 2025 provide a critical, data-driven snapshot of the housing supply challenge. Stakeholders will be watching closely to see if year-end figures confirm this downward trajectory or if a fourth-quarter rebound can partially offset the earlier declines. The report serves as a clear call to action for more effective strategies to unlock new housing development.