As resale home prices across Canada fall\u2014with the national benchmark down 3% year-over-year\u2014a troubling paradox is emerging: cheaper existing homes are making new construction projects unprofitable, threatening to stall the very supply gains that improved affordability. CMHC now forecasts declining housing starts through 2028, citing weak demand, high costs, and rising inventories. For GTA readers, this matters significantly. While Ontario continues to see price losses, the construction slowdown is spreading unevenly\u2014rental development is outpacing ownership housing in major markets like Toronto, Montreal, and Vancouver. July housing starts fell 5% month-over-month and 19% year-over-year in centres of 10,000+ people. The fundamental problem: builders can’t afford to start projects if resale prices don’t support construction costs. Without intervention, today’s affordability gains could evaporate as tomorrow’s supply weakens. Energy price increases and elevated borrowing costs compound the challenge, making purchase and development financing more expensive. This deep-dive analysis from Storeys explores the mechanics of Canada’s housing paradox and what it means for your market.<\/p>\n
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