September 29, 2025 | Intervention Required

Happy Monday Morning!

As we have been highlighting for quite some time, the new housing sector is in shambles and isn’t likely to improve for at least another year or two. As always, governments are slow to react despite a lot of hand waving from the private sector.

Recent data from Altus Group shows us there has been no uptick and the trend of plunging home sales remains in tact.

There were just 300 new home sales in August across the entire GTA, which was down 42% from August 2024 and 81% below the 10-year average, according to Altus Group. Things are even worse in the new condo market where there was a mere 118 units sold in a major metropolitian city of nearly 7 million people. Woof.

Year to date there’s only been 1354 new condos sold in the GTA, that’s down 90% from the ten year average of 12,875 unit sales.

In other words, pre-sales aren’t slow, they’re effectively non-existent.

Here’s the headline from BILD Canada, which represents more than a thousand home builders and developers across the GTA.

More from BILD,

“GTA new home sales in August 2025 remained at rock bottom levels. New launches, in particular high-rise projects, over the past 12 months have been at a record low and at the same time, completions have reached a record high,” said Edward Jegg, Research Manager at Altus Group. “As further projects reach completion, new home tradespeople are becoming increasingly at risk of not being able to find employment and therefore joining the growing number of Canadians without work, putting additional strain on the economy.”

“With pre-construction inventory dropping dramatically, the signs are clear that the new residential sector in the GTA is basically stopping. Greater Vancouver is seeing a third of its normal activity and will be soon in a similar place, many other Ontario markets like Ottawa and the Kitchener-Waterloo area are struggling, and we are now seeing even some troubling signs in Calgary. Why is the government ignoring these obvious warning signs?”

As this newsletter has highlighted for over a year, pre-sales lead housing starts, and so housing starts will continue to fall dramatically in the year ahead. Remember, CMHC quantifies a housing start once the foundation is built back to grade, which for a condo building can take several years. Housing starts are a massively lagging indicator.

In due course, the media will soon be commenting on the collapse in housing starts, amplifying political pressure on a government that promised to double the rate of housing construction over the next decade.

If I were a betting man i’d take the under. In fact, it seems quite probable that housing construction will get cut in half, rather than double, despite the governments promises.

The recent announcement of the $13B federal agency called Build Canada Homes is not the panacea, and will almost certainly fail to deliver on more far fetched goals, but should be an effective means of transferring tax dollars to polticial insiders.

On a more positive note, it sounds like something is coming on municipal development charges.

Housing minister and former mayor of the City of Vancouver, Gregor Robertson told the Union of B.C. Municipalities last Friday that, “We’re looking at an approach to roll out later this year that will strike a balance there of reducing development charges, but also making sure that local governments continue to invest in the housing infrastructure we need to build homes.”

Considering government fees and taxes account for roughly 20% of the cost of a new home in Vancouver and Toronto, there’s a lot of fat to trim. Development charges alone in the city of Toronto are north of $100K for a two bedroom condo.

We remain skeptical any trimming will be enough to alter the direction of the new housing market which requires either significantly lower prices or a total shift in investor sentiment. Probably both.

Let’s watch.

Steve Saretsky September 29th, 2025

Posted In: The Saretsky Report

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