October 19, 2026 | By Jarrett Hunter, Toronto Realtor®

Toronto’s real estate market has been dealing with slower sales, declining prices in several segments and considerable uncertainty among buyers. Now, another development deserves attention: the number of new homes beginning construction.

According to figures released by Canada Mortgage and Housing Corporation (CMHC) on October 16, housing starts across Canada were down 11% in September compared with the same month last year in communities with populations of at least 10,000.

The Toronto area experienced an even sharper decline in actual monthly construction starts. While fewer new homes might not seem like a major concern when sales are already slow, it raises important questions about the housing supply we’ll have available several years from now.

What’s Happening With Toronto Construction?

CMHC’s September figures show 1,440 homes starting construction in the Toronto Census Metropolitan Area, compared with 3,678 in September 2025. That’s a decline of approximately 61%.

Multi-unit construction, which includes apartment and condominium buildings, accounted for much of the decrease.

It’s important to put these figures into perspective. Construction starts can fluctuate considerably from month to month, particularly in Toronto, where one large condominium development can represent hundreds of units.

CMHC’s six-month trend measure for Toronto was relatively flat in September, which suggests the situation is more nuanced than the single-month decline alone might indicate.

Nevertheless, fewer construction starts can have longer-term implications.

Why Would Builders Slow Down?

Launching a residential development is an expensive undertaking.

Developers must consider construction costs, financing, land prices, regulatory requirements and whether enough purchasers or investors are prepared to commit to a project.

For condominium developments, presales can be particularly important in obtaining financing. If potential buyers are concerned about the market or uncertain about future values, a project may struggle to achieve the sales needed to proceed.

That can result in delayed construction, redesigned projects or developments that don’t move forward at all.

The challenge is that it takes years to bring new housing to market. The decisions being made today could influence how many homes are available toward the end of this decade.

Could Fewer New Homes Eventually Push Prices Higher?

It’s possible, but that outcome isn’t guaranteed.

Housing prices depend on both supply and demand. If fewer properties are built while population and housing demand increase, that could put upward pressure on prices or rents in the future.

However, if demand remains weak, reduced construction doesn’t automatically lead to higher property values.

A balance between housing construction, population growth, employment and affordability is important.

For Toronto condominium buyers and investors, this is particularly relevant because a smaller development pipeline could eventually reduce competition from newly completed buildings.

The bottom line: Toronto’s housing market may be relatively quiet today, but the number of homes being built now will help determine the choices available to future buyers and renters.

Source: Canada Mortgage and Housing Corporation — September 2026 Housing Starts

Jarrett Hunter | Realtor® | RE/MAX Your Community Realty