Two years and multiple housing laws since the Ford government promised to build 1.5 million new homes in a decade to solve Ontario’s housing crisis, key indicators suggest home construction is grinding to a trickle.
The number of housing starts in the first half of 2024 has lagged behind the previous year, while June saw a 44-per cent drop year-on-year. At the same time, new home sales — which can predict future home construction — are also falling.
Data from the Canadian Mortgage and Housing Corporation (CMHC) shows that, between January and June, 36,371 new homes were started in areas of Ontario with more than 10,000 residents. Those figures were a 14-per cent decrease from the previous year.
Last month, the CMHC reported particularly dire figures. In June 2023, 10,114 new homes were started in Ontario, while this year that plummeted to 5,681.
“Doug Ford may like to wear a hard hat and hold a shovel, but he certainly is no homebuilder,” Ontario Liberal housing critic Adil Shamji said, pointing to a series of housing laws passed by the government in recent years.
“What do we have to show for it? We certainly don’t have more homes. In fact, this data shows that we’re building less — it’s damning.”
Since the 2022 election, the Ford government has focused much of its energy on a plan to solve Ontario’s housing crisis by building 1.5 million new homes by 2031. That relies on an average of 150,000 new housing starts every year, with the government hoping to see higher yields in later years.
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Last year, for example, Ontario set itself a target of 110,000 new housing starts. After adding long-term care beds and basement units to CMHC’s data, the province said it had achieved 99 per cent of that goal.
Its hopes of hitting targets this year and into the future are slimmer, according to one building industry specialist.
Flagging new home sales this year are causing serious concern for developers, who use future purchases to raise the money needed to get shovels into the ground on new projects.
“Today’s sales are tomorrow’s housing starts — so we’re really going to see a dearth of supply in the market in two to three years when normally you’d see the construction happening for the sales that have taken place right now,” David Wilkes, BILD president and CEO, told Global News.
“We’ve seen historic lows in sales of new homes in the GTA… As I talk to the members that have been in the industry, this is really quite an unsettling time.”
Wilkes said a “number of factors” had pushed home sales to slow to a trickle. He singled out high interest rates and other costs related to building housing that refuse to fall, including labour, land, taxes and fees.
Data collected in a report prepared for BILD shows sales of condos in the Greater Toronto Area have fallen 60 per cent year-on-year.
Last month was the second-worst June in the past decade for home sales, according to the report, with 732 high-rise sales just five units ahead of June 2020. High-rise sales this year so far are the worst in the past decade, well below even the first year of the pandemic.
Edward Jegg, research manager at Atlus Group, which prepared the report for BILD, said new home sales in June were “weak” with price and affordability the key issue.
Wilkes said the data shows the worst of Ontario’s housing crisis is not yet behind it.
“We’re concerned it is going to get worse before it gets better,” he said. “Sales are a leading indicator… if you look at the high rise, you need to have approximately 80 per cent of the building sold before the financing will be approved to allow that construction.”
The Minister of Municipal Affairs and Housing was not available for an interview in time for publication.
© 2024 Global News, a division of Corus Entertainment Inc.