Toronto has spent years struggling with housing affordability. Now, a dramatic slowdown in new home construction is raising fresh concerns about what comes next for Canada’s largest housing market.

New figures from the Canada Mortgage and Housing Corporation (CMHC) reveal that housing starts across the Toronto metropolitan area plunged 61% in September 2026, compared with the same month last year.

Only 1,440 new homes began construction in September, compared with 3,678 in September 2025.

That’s 2,238 fewer homes getting started in just one month.

And while some buyers might welcome a cooler real estate market, the slowdown could create bigger problems down the road.

Toronto’s Housing Construction Numbers Are Raising Red Flags

The latest CMHC report shows a particularly sharp decline in multi-unit residential construction, the category that includes condominiums, apartments, townhouses and semi-detached homes.

Here’s how September 2026 compared with September 2025:

• Total housing starts: Down 61%, from 3,678 to 1,440 units.
• Multi-unit housing starts: Down 64%, from 3,317 to 1,204 units.
• Single-detached housing starts: Down 35%, from 361 to 236 units.
• Housing starts from January through September: Down 14% compared with the same period in 2025.

These figures cover the Toronto census metropolitan area, which includes Toronto and surrounding communities, rather than just the city itself.

The numbers point to a construction industry facing significant challenges, particularly when it comes to launching large residential developments.

Why Are Developers Building Fewer Homes in Toronto?

For years, Toronto’s condominium market was one of the country’s biggest construction engines.

Developers launched new towers, investors purchased pre-construction units, and cranes became a permanent feature of the city’s skyline.

But the economics of building new condos have changed.

Higher construction costs, expensive financing, weaker investor demand and declining pre-construction sales have made it increasingly difficult for developers to move forward with projects.

Many condominium developments depend on selling a significant percentage of their units before construction financing can be secured.

When buyers hesitate, projects can be delayed or cancelled.

And with fewer projects getting off the ground, the number of new homes entering the market in future years could shrink.

Could Toronto Home Prices Actually Rise Again?

Here’s where things get interesting.

A slowdown in construction doesn’t necessarily mean Toronto home prices will immediately increase.

In fact, weaker demand and a large inventory of existing properties can put downward pressure on prices in the short term.

But real estate operates on a longer timeline.

A condominium tower can take several years to complete. When developers stop launching projects today, the consequences may not become obvious until years later.

If housing demand eventually strengthens while fewer new homes are being completed, buyers and renters could face another supply shortage.

That could put renewed pressure on prices and rents.

In other words, today’s construction slowdown could become tomorrow’s housing problem.

What Does This Mean for Toronto Renters and First-Time Homebuyers?

For renters, the biggest concern is future supply.

If fewer apartments and condominiums are built, there may eventually be fewer housing options available as the city’s population and housing needs evolve.

For first-time buyers, the picture is more complicated.

A slower market could create opportunities to negotiate better prices on existing homes or completed condominium units.

However, reduced construction could also mean fewer new properties to choose from in the coming years.

For families trying to establish themselves in Toronto, especially newcomers and young professionals, housing affordability remains one of the city’s biggest challenges.

Is This Happening Across Canada?

Toronto isn’t the only market experiencing weaker construction activity.

Across Ontario, housing starts in urban centres declined 46% in September compared with the previous year.

Nationally, actual housing starts in communities with populations of at least 10,000 declined 11% year over year.

However, Canada’s seasonally adjusted annual rate of housing starts actually increased 3% from August to September.

That difference matters.

While Toronto experienced an especially difficult month, the national picture is more mixed.

CMHC has warned that Canada still faces a substantial long-term housing supply gap and that insufficient construction could make lasting affordability improvements difficult to achieve.

Toronto Still Has Thousands of Homes Under Construction

Despite the dramatic September decline, construction hasn’t stopped across the GTA.

Approximately 88,108 homes were still under construction in the Toronto metropolitan area in September.

Another 4,766 homes were completed during the month, while roughly 19,526 approved units had not yet started construction.

That means new housing will continue to reach the market from projects already underway.

The bigger question is whether enough new developments will begin construction to replace those being completed.

What Happens Next for Toronto’s Housing Market?

Toronto’s housing market is facing an unusual combination of challenges.

Some buyers are waiting for prices to fall further. Developers are struggling to make new projects financially viable. And governments continue to face pressure to address the city’s long-term housing shortage.

The 61% decline in September housing starts is significant, but one month’s figures don’t tell the entire story.

What matters now is whether the slowdown continues through the remainder of 2026 and into 2027.

If construction remains weak for an extended period, Toronto could find itself facing another housing supply crunch just as market conditions begin to recover.

So here’s the big question: Is Toronto’s real estate slowdown creating a buying opportunity, or are we setting ourselves up for another housing crisis?

For anyone living, renting or investing in the GTA, it’s a question worth watching.

Toronto Latinos | Toronto News, Real Estate & Community Stories

Our next party is going to be a big one. Don’t miss it!