‘What more is needed?’

On the same day Mark Carney was spanked over new house construction, homebuilders swore a collapse is coming.

In Ottawa the Parliamentary Budget Office said there’s no way the feds will get the 3.2 million units constructed that Canada needs over the next decade. We would need to throw up more houses every single year than have every been built in any one year – 290,000. But Carney, in a wild statement during the election – promised that even more would be built every twelve months. Half a million.

So where are we?

In a hot mess, apparently. Alberta is building but other provinces are failing and the mighty GTA has already thrown in the towel. In a market of six million people, buyers have all but vanished. There is no confidence – nor the ability to buy at current prices. And so, virtually no sales.

Yesterday the industry released its latest stats. Yikes. The data we reported here a few days ago was grim. This is worse.

Home sales tank in Canada’s biggest market

Source: Altus Group, BILD

In this mega-market there were only 209 single-family house sales and 150 condo deals. That total of 359 for July is 81.5% lower than the average for the month. It’s down by half from last year, which sucked. “The protracted nature of this market has now surpassed the severe downturn in new home sales during the early 1990s,” says the industry.

In the early ‘90s, by the way, this region suffered the worst real estate plop – for both new and resale homes – in living memory. Prices ultimately dropped 32% and took more than a decade and a half to recover. Many builders were completely wiped out, and a resulting shortage of new stock ten years later helped fuel the FOMO and pandemic-addled price explosion of recent years.

“Emerging from the 1990s downturn took years, with prolonged negative economic impacts and unemployment in the sector,” says a spokesguy for the construction sector. “The market, leaders within the industry and top economists are flashing every possible warning light, and the lesson from the 1990s downturn is clear: if government stands by, the pain will be deep and prolonged. To avoid repeating history, government intervention is not optional – it is urgently due.”

(As we reported the other day, the builders want immediate tax relief for buyers of new homes and an end to the foreign buyer ban.)

As for inventory, never before have so many new units been for sale for so long, attracting so few buyers. The total in this market has reached 22,654, of which 16,670 are condos and the rest (almost 6,000) singles, including detached, towns, semis and row homes. Sitting. Ready. Unloved.

“What more evidence is needed to demonstrate that we need concerted action to address the crisis that is stalling out new supply and compounding the challenges?” ask the builders.

Well, how about price? New condos average just over a million and singles ring in at just under $1.5 million. Here’s what happened in the last few years…

New home prices 26% off peak in 1990s rerun

Source: Altus Group, BILD

The price of a new home has fallen 6% in the past year and is now 26% below the peak hit in the spring of 2022. That’s a hefty retreat in the space of two years, and approaches the all-time peak-to-trough experience of the 1990s.

The industry says the drought in sales means a collapse in building activity. Without buyer demand, there is no way developers will move ahead with new projects. After all, they can’t even get construction financing without pre-sales equalling 70% of available units. Builders also say that given the price of land, the wages demanded by trades, the price of loans and the cost of materials (let alone the effect of tariffs) residential units cost what they cost. The profits have gone. This is survival. ‘Affordable’ housing is not possible in the private sector.

So, what is the role of government? To use taxpayer dollars subsidizing the cost of homes for some people when everyone else paid full freight? How can politicians ethically throw billions into that when the country is running a massive deficit just to maintain existing social programs?

Or, maybe it’s time to break the homeownership fetish. Take the massive gift of tax-free profits away from homeowners, or provide an equal benefit to those who lease.

This is unsustainable. Wake up.

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Source: https://www.greaterfool.ca/2025/08/27/what-more-is-needed/