‘It’s like offering someone a Ferrari at a great price – it doesn’t matter if at the end of the day they can’t qualify for the loan’
Canada’s housing market is still frozen as 2025 nears an end – but while inventory has jumped, the country continues to face a long-term supply crisis as a variety of challenges weigh on homebuilders and the construction outlook.
Builder confidence across the country remains low, according to the Canadian Home Builders’ Association (CHBA), slumping in the year’s third quarter amid growing affordability woes and cost challenges.
And Danny Di Meo (pictured top), president and founder of Toronto-based builder Caliber Homes, told Canadian Mortgage Professional there remained a disconnect in the current market between demand for homes and the feasibility of delivering that supply.
“There’s still real demand for housing but high interest rates, construction financing constraints, and cost pressures have made many projects – especially high-density ones – difficult to launch,” he said. “We’ve seen a lot of projects across the GTA [Greater Toronto Area] go on hold for that reason.”
The current pace of housing starts across the country remains well below what Canada Mortgage and Housing Corporation (CMHC) says is needed to restore affordability by 2030.
Buyer caution clouds builders’ outlook
The fact that plenty of buyers are sitting on the sidelines as they wait to see whether interest rates and prices will fall further has also made it difficult for builders to gauge when the market might rebound.
Toronto Regional Real Estate Board (TRREB) president Elechia Barry-Sproule highlighted that continuing buyer hesitance and lingering economic concerns as key factors behind sluggish November sales activity.
“Buyers are cautious,” Di Meo said. “They’re watching rates closely, and confidence has been slower to return than people expected.
“From a builder’s perspective, it means being very careful about price point, product mix, and timing, and not forcing a launch before the market is ready.”
Housing starts across Canada were up in November, but that was largely driven by construction in Quebec and the Atlantic and Prairie provinces as Ontario and British Columbia continued to struggle.
CMHC reports housing starts rose 9.4% in November to a SAAR of 254,058 units, driven by Quebec and Atlantic provinces, even as Ontario and BC lag. Kevin Hughes notes slowing momentum but year-to-date starts remain elevatedhttps://t.co/kC7rPYiqrK
— Canadian Mortgage Professional Magazine (@CMPmagazine) December 15, 2025
That means that while supply has improved across much of the housing market (including in Toronto’s beleaguered condo space, where inventory has surged), the long-term picture remains worrying.
‘If the labour isn’t there, the homes won’t get built’
Builders have long called for government measures to help boost homebuilding and slash red tape, with regulation and application gridlock viewed as some of the biggest contributors to Canada’s construction malaise.
Approvals and servicing timelines, according to Di Meo, remain the most prominent factors in determining whether homes actually get built in Toronto.
“If municipalities can speed up site plan reviews, align permitting with infrastructure servicing, and reduce some of the red tape in the early stages,” he said, “that would make a big impact.”
Fee certainty would also help, he said, in allowing builders to make better decisions when they know what carrying costs look like over the life of a project.
And he called for stronger government focus on skilled labour to help lift homebuilding out of its current slump. “You can streamline processes, but if the labour isn’t there, the homes won’t get built,” he said.
“Canadian immigration policy needs to bring in more trades and construction-ready workers, not just tech talent.”
The current homebuying lull and ongoing construction challenges suggest there’s no easy answer to the question of when the Toronto and broader Canadian housing markets will finally bounce back.
One big overnight signal won’t herald the beginning of that recovery, according to Di Meo. Instead, “it’s a combination of consumer confidence, job security and access to financing,” he said. “Interest rates coming down is positive – but it’s not enough on its own to flip the market into a full recovery.
“It’s like offering someone a Ferrari at a great price – it doesn’t matter if at the end of the day they can’t qualify for the loan. The same goes for housing. The cost of money and the availability of money both have to improve for demand to really come back.”
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