Canada is in the midst of a deepening housing crisis, and the most alarming developments are unfolding in Ontario and British Columbia—provinces that together account for roughly half of the nation’s population. Amid ongoing challenges such as affordability, supply constraints, and rising demand, one critical question looms: how bad will new home construction get in Ontario and British Columbia?
The answer, backed by current trends and projections, is deeply concerning.
Why Ontario and British Columbia Matter Most
Whenever the topic of Canada’s housing market arises, discussions often shift to include perspectives from other provinces such as Saskatchewan or New Brunswick. While these regions are essential to Canada’s cultural and economic fabric, the population numbers tell a compelling story. Ontario and British Columbia are home to approximately 50% of Canada’s nearly 42 million residents. When Alberta and Quebec are added to the equation, that number rises to 86%.
In short, the majority of Canadians live in a handful of urbanized, high-demand areas. This concentrated population means that any significant changes to housing supply in Ontario and BC will have a disproportionate impact on the national housing landscape.
A Historic Collapse in Housing Starts for Ownership
A dramatic shift is underway in Canada’s home construction market. If one isolates new housing starts for ownership properties—excluding purpose-built rentals—the numbers in Ontario and British Columbia are plummeting toward levels not seen in over half a century. In Ontario, projections suggest that housing starts for homes intended for purchase (single-family homes, townhouses, semis, and condominiums) could fall below 15,000 units annually.
This decline would represent a historic low. For context, such figures harken back to a time long before modern population and urban growth—when the province's population was a fraction of what it is today. These are not normal market fluctuations; they are structural signals of a market at risk of paralysis.
The Rental Surge vs. Ownership Construction Collapse
To be clear, rental housing construction is still moving ahead at a relatively healthy pace. Purpose-built rental apartments, especially high-rise developments, are seeing strong investment and activity. In fact, rental construction is at or near a 35-year high in Ontario. However, this growth in rentals does not offset the severe shortfall in ownership-oriented construction.
There is nothing inherently wrong with expanding the rental supply. In fact, rental housing is a vital part of a balanced housing ecosystem. But when virtually all new construction focuses on rentals, and almost none addresses homeownership, the imbalance becomes dangerous—especially in provinces where the desire to own remains strong.
Structural Bottlenecks and Delays
The delays in construction for ownership housing are not accidental. They are driven by a combination of economic, regulatory, and planning challenges. For high-rise condominiums, the development cycle can take five to six years from project approval to occupancy. That means that if construction is not starting now, supply relief will not be seen until 2030 or later.
Low-rise developments—such as detached homes, townhouses, and semi-detached dwellings—are facing their own challenges. Land availability, municipal zoning restrictions, and high interest rates have made it financially unviable for many builders to proceed. Without significant change in policy or market conditions, the sector risks grinding to a near halt.
British Columbia’s Slow Rollout of Promised Plans
British Columbia, particularly the Greater Vancouver Area, is a case study in ambitious planning with limited execution. While there is no shortage of announcements—such as the Broadway Plan and other urban intensification strategies—the gap between planning and actual construction remains wide.
Despite bold visions and policy frameworks, builders are reluctant to move forward in uncertain economic conditions. Market volatility, construction costs, and prolonged approval timelines are slowing the pace at which these plans turn into real homes. Meanwhile, the demand for ownership housing in the Lower Mainland continues to outpace supply by a wide margin.
Federal Policy Focused on Rentals, Not Ownership
Recent federal announcements around housing policy indicate that new funding and support programs will continue to focus on affordable rentals, often owned or subsidized by municipalities. While affordable rental housing is an important and necessary part of the solution, it does not address the growing demand for homes to purchase.
Canadians still overwhelmingly aspire to homeownership. If government efforts do not begin to support construction of homes for sale—particularly in the low- and mid-density segments of the market—then the path to ownership will continue to narrow, locking out more prospective buyers.
The Coming Scarcity—and Its Consequences
The combination of halted ownership construction, continued immigration (even if at a slower pace), and steady demand will inevitably create a scarcity of homes for sale. This scarcity will likely lead to a resurgence in home prices, especially in the detached, semi-detached, and townhouse markets in Ontario and British Columbia.
Even in a moment where housing prices have seen some declines, the underlying supply-demand dynamics suggest that this may be a temporary reprieve. With no substantial new ownership housing coming online in the next few years, prices may begin to rise again—not because demand is surging, but because there will simply be nothing available to buy.
A Crisis Within a Crisis
What we are witnessing is a crisis layered within another crisis. On the surface, the Canadian housing market is already unaffordable, inaccessible, and under immense pressure. But beneath that, a more troubling trend is emerging: the complete erosion of new home construction for purchase in the two provinces where most Canadians live.
This is not merely a policy oversight or market anomaly. It is the result of cumulative decisions—municipal zoning policies, provincial funding priorities, federal housing strategy—that have prioritized rentals and regulatory caution at the expense of ownership supply.
What Needs to Change
To avoid long-term damage to the housing ecosystem in Ontario and British Columbia, a coordinated, urgent response is required:
Fast-track approvals for ownership developments—particularly in low- and mid-rise segments.
Provide financial incentives and tax relief to builders undertaking ownership projects.
Encourage densification in suburban and exurban areas where single-family and townhouse developments can be built cost-effectively.
Rebalance federal and provincial housing programs to include strong support for ownership supply.
Final Thoughts
In a nation as prosperous and resource-rich as Canada, a persistent and growing housing shortage should not be the norm. But if we allow ownership construction to collapse in Ontario and British Columbia, we are setting the stage for a generation locked out of homeownership—and for an even more distorted and inequitable housing market.
The time to act is now. Planning alone is no longer enough. Canada needs to start building again—especially homes that people can afford to buy.
