Ontario’s goal to build 1.5 million homes in 10 years seems increasingly unattainable as new budget projections for housing starts indicate. In 2022, approximately 100,000 homes were built in Ontario, the first year considered in the goal, but forecasts predict that the rate of housing starts will likely hover around 80,000 annually in the next few years. These projections are lower than last year’s budget expectations, with the estimated number of homes built in 2024 reduced to 79,300 from last year’s expectation of 87,300. Finance Minister Peter Bethlenfalvy explains that these private-sector forecasts reflect an economic environment where rising interest rates are impeding building. However, the government has taken steps to encourage new home construction, such as a law that reduces developers’ fees for certain builds, including affordable housing. The government will continue to work with cities, the private sector, and other groups to build homes, and it hopes to counter the shortage of skilled tradespeople by putting $75 million towards the Skills Development Fund and $25 million towards the Ontario Immigrant Nominee Program over the next three years. Despite these efforts, rising interest rates are hindering overall growth, and the province must consider further measures, such as the rapid deployment of unused provincial properties for housing and stronger intensification rules around transit hubs, to solve the housing affordability crisis. The budget predicts that the number of homes resold will decrease by almost 9% in 2023, but it is expected to rise by 21% the following year before stabilizing. Average home prices are predicted to decline by 9.7% in 2021 and then rise by 2.2% in 2024 before continuing to increase. The CEO of the Ontario Home Builders’ Association, Luca Bucci, praised the budget’s steps to accelerate housing delivery by simplifying entry to skilled trades and investing in crucial highway infrastructure.
Ontario predicts smaller home construction growth in budget.
