色色啦

The downside to lower home prices is that they put new housing construction at risk. There is a price below which it simply becomes unviable to build, for both for-profit and not-for-profit developers alike. We appear to have reached that point. , only 208 new single-family homes and 137 new condo units were sold, not just in 色色啦, but the entire GTA. That represents a 74 per cent and 91 per cent decline from the 10-year averages. These declines are happening while both the federal and provincial governments have committed to doubling housing starts.

Falling housing starts not only make it more challenging to meet our supply targets, but also have long-term economic consequences. Should , tax revenues would fall by $6.6 billion per year across all orders of government, and up to 41,000 jobs could be lost at a time when 色色啦鈥檚 unemployment rate is already elevated at 9.7%.

色色啦 appears to be stuck in a paradox. It needs lower home prices, but it also requires more homes, and lower prices make it financially unviable to build that housing.

But there is a path forward which simultaneously allows for lower prices and financially viable construction: homebuilding costs must fall further than prices. Some of this will happen organically; land prices typically fall in periods of low demand for homebuilding. However, other costs are either unlikely to fall, such as the cost of raw materials, or those we would prefer not to see fall, like the wages of tradespeople. And that鈥檚 before we even consider the unpredictable nature of our trading relationship with the United States.

While governments cannot directly control the price of copper wire or lumber, they can change the taxes and fees on new homebuilding. Municipal development charges can cost hundreds of thousands of dollars to the cost of a new home. While reducing these charges does come at a fiscal cost to governments, so to does inaction, as the current homebuilding slump Ontario municipal governments over $2 billion in development charge revenue each year. Last year, Vaughan Mayor Stephen Del Duca cut development charges, as he recognized they were at levels that were limiting homebuilding, stating he would rather 鈥渨e get half of something than 100 per cent of nothing.鈥� It鈥檚 a lesson all municipalities could learn.

If development charges amount to a tax, there is also the more plain issue of sales tax on homes itself. The HST also adds nearly 13 per cent to the cost of newly constructed homes, a cost that is not borne by the sale of existing homes, nor by purpose-built rentals since . While provincial and federal rebate programs exist, they have not been adjusted for inflation in decades, with homes priced over $450,000 being ineligible for a federal rebate, as the program is based on Updating these programs for inflation would lower the cost of new housing, boosting construction, while not stimulating demand for existing housing, as the purchase of those homes are not subject to HST and are ineligible for a rebate.

Governments have a challenging path ahead, simultaneously needing lower home prices and more homes to be built. While the solutions to these challenges have an associated fiscal cost, so too does the cost of inaction.

Correction — July 10, 2025

This article has been updated. House prices are down 20 per cent from their 2022 peak, not 30 per cent as previously reported.