Construction Industry Struggles
One of Ontario’s most pressing priorities is building hundreds of thousands of homes every year. However, the construction industry is currently in a slump due to various challenges.
Rising Costs and Interest Rates
Interest rates have varied over time, but the current situation is different due to the persistent high costs of building and renovating housing. This has significantly impacted housing construction numbers in Ontario.
Decline in Construction Numbers
In the first six months of this year, Ontario saw 36,600 new units under construction, a 14% drop from the 42,000 units in the same period in 2024. Additionally, there was a 44% drop in housing construction in June compared to June 2023.
Plummeting Sales Figures
The construction industry anticipates the situation will worsen. New home sales in June this year were 50% lower than the previous year. Since today’s sales are tomorrow’s housing starts, a supply shortage is expected in the market within two to three years.
Policy and Economic Challenges
Critics argue that the Ford government’s policies and reversals have created uncertainty for developers and home builders. This unpredictability makes it difficult to plan projects in advance. Premier Doug Ford, however, attributes part of the problem to the Bank of Canada’s high interest rates.
Call for Government Action
Developers believe that faster approvals, as well as reduced taxes and fees, could stimulate construction. They emphasize the need to make homebuilding affordable and are calling on the government to collaborate with them to address these challenges.
Unclear Government Response
It remains unclear what specific actions the Ford government is taking to address the housing slump. The Minister of Housing was unavailable for an interview at Queens Park.
Discover more from The Industry Dot Biz
Subscribe to get the latest posts sent to your email.
