GTA New Home Sales Plummet to 45-Year Low, Stoking Economic Fears

TORONTO, ON – January 22, 2026 – The Greater Toronto Area's new housing market effectively seized up in December, capping a year of unprecedented decline that has industry leaders warning of massive job losses and a future housing supply crisis. According to data released today, 2025 now stands as the worst year for new home sales in the 45 years that records have been kept.

The numbers, provided by Altus Group for the Building Industry and Land Development Association (BILD), paint a grim picture. A mere 240 new homes were sold across the GTA in December, a figure that is down 24 per cent from an already record-low December 2024 and a staggering 82 per cent below the region's 10-year average for the month.

For the entire year, total sales reached an all-time low of just 5,314 units, a stark conclusion to a year defined by buyer hesitancy, high borrowing costs, and persistent affordability challenges. The collapse in activity has sent shockwaves through the construction sector, a key driver of Ontario's economy, raising alarms about its immediate health and the long-term consequences for a region already grappling with a severe housing shortage.

A Market in Deep Freeze

The year-end data confirms a market not just cooling, but frozen solid. The annual sales total is a fraction of the region's typical activity, falling dramatically short of what is needed to house a rapidly growing population.

“GTA new home sales in December 2025 reached an all-time low, bringing a fitting close to 2025,” said Edward Jegg, Research Manager at Altus Group. “Never in the 45 years that new home sales data have been collected for the GTA have we seen just 5,300 sales for an entire year.”

The slowdown was felt across all housing types. Sales of new condominium apartments—which include units in low, medium, and high-rise buildings—totaled only 87 units in December, a 42 per cent drop from the previous year and an astonishing 91 per cent below the 10-year average. For the full year, only 2,067 new condos were sold, down 89 per cent from the decade-long average.

Single-family homes, including detached and semi-detached houses, fared only marginally better. There were 153 sales in December, down eight per cent from December 2024 and 59 per cent below the 10-year average. The annual total of 3,247 single-family sales represents a 63 per cent decline from the historical average.

Jegg pointed to a confluence of negative factors suppressing demand. “2026 is likely to see geopolitical concerns linger, prices remain elevated and the Bank of Canada has indicated the cycle of interest rate cuts has ended – thus the main drivers of buyer hesitancy are expected to drag on well into the year,” he noted.

The Inventory Paradox and a Looming Supply Crunch

Paradoxically, the historic collapse in sales is occurring alongside record-high levels of available inventory. In December, 20,849 new homes remained unsold in the GTA, including over 15,000 condominium units. This represents 26 months of supply at the current glacial sales pace—the highest inventory level ever recorded.

This glut, however, masks a more dangerous long-term problem. The lack of sales has forced developers to slam the brakes on new projects, leading to a wave of cancellations and a rapidly shrinking pipeline of future homes. In 2025, a record 28 condominium projects, totaling over 7,200 units, were shelved. While some of these were converted into purpose-built rentals, the overall trend points to a sharp decline in future construction.

Market analysts warn that this halt in development is setting the stage for a severe supply crunch in the coming years. Projections show a dramatic drop-off in new condo completions expected in 2026 and 2027, with virtually no new units slated to be finished by 2029 if current trends hold. This means that while buyers today are sidelined by affordability issues, the region is failing to build the housing it will desperately need tomorrow, potentially leading to even more intense price pressures in the future.

Economic Shockwaves and a Desperate Call for Intervention

The fallout from the stalled housing market extends far beyond unsold properties, threatening a significant blow to the provincial economy. BILD warns that the steep decline in construction activity puts tens of thousands of livelihoods at risk.

“New home sales are down well into the double digits across the province, putting 100,000 jobs at risk in Ontario alone,” said Justin Sherwood, Chief Operating Officer at BILD. “To find a comparable collapse in new home construction, you would probably have to look back to the 1940s. New home construction is a cornerstone of our economy, yet it has effectively stalled.”

In response to the crisis, the industry is making an urgent plea for government intervention. BILD is advocating for a significant tax policy change to reignite demand. “Now is the time to eliminate the HST on all new homes to lower the cost of housing and get buyers back into the market and the industry back to work,” Sherwood stated.

Currently, new homes are subject to a 13 per cent Harmonized Sales Tax in Ontario, though rebates exist for a portion of the tax. Eliminating it entirely would provide a substantial, immediate reduction in the final price for homebuyers. This demand-side stimulus contrasts with the federal government's recent focus on supply-side solutions, such as its new 'Build Canada Homes' agency, which aims to build affordable housing on public lands.

The Unaffordable Reality

At the heart of the market paralysis is a simple and brutal reality: despite some price moderation, new homes in the GTA remain profoundly unaffordable for the vast majority of prospective buyers. The benchmark price for a new single-family home stood at $1,409,725 in December. While this is down nine per cent over the last year, it remains far out of reach for typical households.

Meanwhile, the benchmark price for a new condominium apartment has hit an “apparent price floor” at $1,021,235. Combined with mortgage rates that remain elevated due to the Bank of Canada’s firm monetary policy, the monthly carrying costs for these properties are prohibitive.

The dream of homeownership for many in the GTA is now on ice, caught between sky-high prices and punishing borrowing costs. The current standstill is creating a dangerous feedback loop where today's lack of sales is choking off the development of tomorrow's desperately needed housing supply, ensuring the region's affordability crisis will continue to deepen.