Toronto Mayor Olivia Chow highlighted this week that 73% of 2025 housing starts were City-led or City-supported
That’s a good thing.
When home prices fall 25% and private builders suddenly stop building, it’s important for the public sector to step up and keep homes moving forward. We are seeing the same slowdown across Ontario and B.C.
This is a normal part of the building cycle.
Could the City do more to encourage private builders? Of course. Even cutting development charges, as Vancouver did, by 20% would help on the margins.
But let’s be honest: that’s not going to spark a surge in new housing starts when the economics simply don’t work.
And this is the part many pundits get wrong.
Every housing commentator today wants to blame Olivia Chow and Doug Ford for the crumbling housing starts.
But the real cause sits years behind us. Ontario experienced a housing bubble, fuelled by speculative demand and the belief that real estate was a guaranteed path to wealth.
Taxes didn’t “restrict supply” when prices were soaring in 2022.
But now that the bubble has burst, they’ve suddenly become the scapegoat.
The smarter long-term approach to housing policy, and one I’ve been arguing for, is to build a system that doesn’t rely on ever-rising prices to deliver supply.
Yes, that likely means more modest price appreciation and perhaps slightly lower supply during the boom times.
But in exchange, a more balanced, resilient and affordable housing market over the long run.
John Pasalis is President of Realosophy Realty. A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been utilized by the Bank of Canada, the Canadian Mortgage and Housing Corporation (CMHC) and the International Monetary Fund (IMF).
Have questions about your own moves in the Toronto area as a buyer, seller, investor or renter? Book a no-obligation consult with John and his team at a Realosophy here: https://www.movesmartly.com/meetjohn
December 5, 2025
Market |