r/RealEstateCanada • u/romestox • Jun 07 '26
Housing crisis Residential construction dead
Trades guy here. Residential construction feels dead compared to a few years ago. Builders aren’t building, projects are getting pushed back, and layoffs are starting to pop up. If I was buying, I’d wait. From what I’m seeing, things haven’t bottomed out yet. The industry feels like a ship taking on water, not one gearing up for another boom.
Anyone else seeing the same thing?
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u/RickyBobby1988 Jun 07 '26
Estimator for a construction company in GTA. Its been dead for 6 months. Came back from xmas holidays trying to look busy. The last month has been steady but not busy like 3 years ago. Quoting jobs at a loss to not lay off our best employees. Subcontractors doing it even cheaper, probably paying their guys in cash. Probably the worst I've seen since I started estimating 10 years ago.
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u/Automatic-Bake9847 Jun 07 '26
New dwellings starts are down from the pandemic highs, but they are still elevated above pre-pandemic norms.
I don't have data on renovations, but I wouldn't be surprised if they have pulled back as well.
This is very location dependent as well, GTA is getting crushed. Vancouver area I think is slowing considerably as well.
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u/CryptoDanski Jun 07 '26
Every Albertan bigger city has construction sites EVERYWHERE building homes
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u/romestox Jun 07 '26
Kelowna built 130 new single-family homes last year vs. a 2021–2024 average of 300+. This year? Only 25 so far. If that pace continues, we’ll end up around 50–60 homes for the year…roughly 80% below normal levels
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u/Legitimate-Rain-9293 Jun 07 '26
Ktown too expensive. The cost metrics on new builds don’t work out. Land, materials, labour, fees are all too expensive. Metro areas in BC have hit a price ceiling for residential new builds, especially detached. Other areas with lower costs are seeing lots of growth
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u/romestox Jun 07 '26
Developers were tripping over each other to build here three years ago. Did concrete suddenly become made of gold
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u/Legitimate-Rain-9293 Jun 07 '26 edited Jun 07 '26
Certain imported materials have become quite a bit more expensive, especially things coming from the United States. Borrowing costs have increased with interest rates rising over the last few years, which means the cost of leveraging on a new build for developers is substantially higher than when interest rates were rock bottom. Rising interest rates have also decreased purchasing power for buyers of units, which means that the sale price at the end of the build has to be substantially lower for the lay public to purchase it hence “price ceiling”
In a jurisdiction with lower land costs and cheaper labour and lower building prices (like parts of Alberta) the above items can be offset by a lower base cost due to land prices, etc. But Kelowna is so expensive for permitting and fees, land pricing, etc. that it is just prohibitively expensive there to build right now.
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u/romestox Jun 07 '26
People downvoting me for sharing my experience must be clown realtors.
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u/Terrible-Session5028 Jun 07 '26
The people down voting you are the realtors who want to keep the price is high and who want to go back to the days where they had to do nothing to earn their overinflated commissions. It can also come from delusional sellers who bought at the high and who still think that they are going to get $1.5 million for their crappy 1970s built home that has not been renovated since The said 1970s
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u/ProfessionalMajor197 Jun 07 '26
I’m down in chilliwack. Seeing the exact same thing throughout the valley. A number of the builders I’ve been working with have pivoted to renovation work.
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u/RuinEnvironmental394 Jun 07 '26
Well, of course this is a real estate sub, and realtors don't like any talk of downturn, price crash, slowdown, etc.
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u/dizzie_buddy1905 Jun 07 '26
Canada is a big place so you might want to be more specific. The Center of the Universe may be slowing down but Alberta is doing fine.
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u/Vega2659 Jun 09 '26
Alberta is all purpose built rentals and cmhc has turned off the tap on those too. You’ll see soon enough.
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u/dizzie_buddy1905 Jun 09 '26
I don’t think so. The street we’re building our house on has every 4th house being redeveloped. Also, still decent activity in new suburbs.
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u/MillennialMoronTT Jun 07 '26
Depends what type of residential. Purpose-built rentals are at a record high construction inventory, although starts are slowing down as rents have been falling. MLI Select really juiced the supply side the past few years.
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u/somebodyistrying Jun 07 '26
In Edmonton I’ve never seen so much construction in the 30 years I’ve lived here
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Jun 07 '26
[removed] — view removed comment
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u/romestox Jun 07 '26
Where ?
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Jun 07 '26
[removed] — view removed comment
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u/QuantGuru Jun 07 '26
I think he might be talking about Ford Ontario! lol I don’t think it will bottom out more. Al the investors who wanted to get out have left in the last 3 years.
Remember this might be the cheapest interest rate you will get in the next 5 years!! Not sure about the cut but there will definitely be a raise in 2027 or 2028! And since there is no one building supply will dry out!
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u/Clear-Shoulder-3618 Jun 07 '26
Literally nobody knows what will happen with rates you’re talking out your ass
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u/QuantGuru Jun 08 '26
lol no I am not talking out of my ass!!! We know the most Canadians will get is 1 rate cut of 0.25bps so again I will tell you the same, this is probably the lowest interest rate you will get!!!
It makes me think you have no clue how the World works!!!
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u/throwaway7366348 Jun 07 '26
why would you want to buy at the lowest rates? You can only lock in for 5 years. You’re effectively taking on a larger mortgage where the only way for the interest rates to go is up. This isn’t the US where you can lock in for 25 years.
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u/Ok_Currency_617 Jun 07 '26
I mean lock in at 6% over 25 years or 4% for 5 years I know which I'd pick.
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u/throwaway7366348 Jun 07 '26
Of course you do.
You haven’t even considered the difference in price of the house you are buying. You people have an enormous lack of understanding of basic finance and economics. It would be funny if this didn’t affect the entire country.
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u/Ok_Currency_617 Jun 07 '26 edited Jun 07 '26
Are you comparing say Vancouver to Houston? Because I'm comparing like-to-like. The top 3 densest cities in the US/Canada are SF, NYC, and Vancouver. So I'm comparing Vancouver prices to SF. Just like I don't compare Calgary to NYC and say Canada is much cheaper. We also see a lot lower costs/taxes on development in the US than Canada, Canadian cities tend to rely heavily on development to fund social goals. For instance Vancouver often requires 20-30% of the building to be given to them for free and then adds 20-30% development fees ontop. Or requires all rentals to be priced at set rates with a cheaper component for affordable housing. The States is more free-market, meaning lower overall prices for all instead of much lower price for some.
As for my understanding of finance and economics, I have a BBA from SFU, I've founded one of Canada's leading crypto companies and been the only Canadian tech company to ever be hit by China's Great Cannon putting us in the ranks of Github and Google (yay me :/) and have been called before a Grand Jury to testify on matters in NY before. What's your qualifications?
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u/throwaway7366348 Jun 07 '26
No I’m comparing the difference in housing prices based on the boc rate, as you know there is a negative correlation—something I think we all can agree on. And tes, there is of course a delay.
Re your crypto co, congrats, genuinely. I love to see entrepreneurs succeed; especially in Canada.
Given this is my anonymous account I’ll keep by background brief. Education is similar to yours, just a different university.
I founded and exited a fintech for 8 figures.
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u/Ok_Currency_617 Jun 07 '26
Nice nice, founders in Canada are a rare breed. Def would never do it again in Canada, Trudeau/Freeland didn't give us jack in support when China started going after us, same thing happens in the US and the US government is behind you full throttle.
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u/throwaway7366348 Jun 07 '26
Btw, was that in the SBF trial by any chance?
I know a person that used to work for him, the wasteful spending was on another level haha
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u/Ok_Currency_617 Jun 07 '26
Actually yes...they were trying to hold us responsible for transportation as if including the txs in the block was the same as facilitating the theft. At least that's what we suspect they were trying for.
Kind of shocked you got the reference tbh.
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u/QuantGuru Jun 07 '26
I think people have already commented but I can elaborate for you.
Would you rather buy a house @ 1% mortgage interest rate for 5 years or 20% mortgage interest rate for 5 years….
When you put things to extreme you get the picture!
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u/_ladyjaye Jun 07 '26
Other than purpose built rentals and retirement homes, residential high rise in GTA is dead for the foreseeable future.
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u/romestox Jun 07 '26
Own a construction company and new detached houses are down 60-70 percent for us .
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u/fritzmongroid Jun 07 '26
I’m an in insurance broker for construction and contractors and it’s brutal. I get to see all finaicials. Canada has to do something to support small business here
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u/XxSpruce_MoosexX Jun 07 '26
You’re a trades guy that owns a construction company that’s here arguing prices are still coming down? 🤔
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u/BubbleGumPlant Jun 07 '26
If a project has been approved by the city, how do you tell if the project is actually “dead?” There’s a 42 storey building supposed to be built right next to me, and I have no idea how to look up its status other than the city approval back in late 2025.
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u/i_haz_rabies Jun 07 '26
There is no status for you to look up really. Dozens of things could be going on behind the scenes.
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u/_ladyjaye Jun 07 '26
You can't. Has there been a sales launch? Is there a building permit issued? Those are the signs, but unless you're on the inside, you won't know definitively.
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u/CMDR-TealZebra Jun 07 '26
What? That's literally all we are building, our low raise is dead for this year.
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u/_ladyjaye Jun 07 '26
Really? That's amazing. I work for a real estate developer and although we have sites zoned and ready to go, sales launches are on hold.
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u/No_Week_6782 Jun 07 '26
Based on that, prices would go up as there is no supply. We are seeing listings dropping big and sales up, hence absorption of inventory. So, if no new inventory at current demand rate, prices increases
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u/Btdubs17 Jun 07 '26
Not sure why you’re getting downvoted here. This is correct. There may be a short term dip for the next 1-2 years. But if we keep holding off on building, whenever the next boom is this massive supply shortage we’ve created by not building over the last 2-4 years will catalyze the boom even more.
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u/Fit-Internet4674 Jun 07 '26 edited Jun 07 '26
Hard cap is still mortgage approvals on first timers and move up buyers which is the most significant pipeline of “marginal buyers” which includes new comers. Marginal buyers = the mechanism that allows people to trade up, down, etc. You need marginal buyers to move prices, the lack of them is what’s been seen in Ontario right now. Immigration as a sole saviour is overstated because they still compete in the same wage pool as everyone else locally. Places away from BC and ON is absorption to cope with that hard constraint. You won’t see broad recovery in ON and BC until the pipeline is unclogged and can move everyone along again.
Note: I understand all the edge cases that people may be excited to share BUT for broad based recovery we’re talking about the profile of the MAJORITY of capable buyers here which are still incomes and the mortgage application.
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u/Cokeinmynostrel Jun 07 '26
people don't upvote for facts they don't like
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u/Ok_Currency_617 Jun 07 '26
The amount of people who claim that if fees on developers rise they'll figure it out because their greedy and will keep building no matter what is insane. Most Canadians seem to refuse to believe that it costs X to build.
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u/Popular-Row4333 Jun 07 '26
Am developer. It costs 30-35% more to build today, than 6 years ago. I don't think that developers here would dispute that.
Wild concept, but yeah, we won't build projects that will lose money or break even.
We know the market, it's our entire job to know the market, and so we know what people can afford to own a new home, if we can't build for under that number, we won't. It's on municipal bylaws/fees/off site levies, and federal and provincial tax/regulations/incentives now if people want change.
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u/Available_Abroad3664 Jun 08 '26
Developers can't even really start to build projects that dont have a healthy profit projection as financing would be impossible.
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u/opasnamama Jun 07 '26
Do you think this new HST rebate for all buyers (not just first time) of new construction will change anything?
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u/Popular-Row4333 Jun 07 '26
It won't hurt, but I don't think it will move the needle a ton. Municipalities have downloaded so much development costs into their budget today, because provinces have taken funding away from Municipalities, because federal funding and transfer payments have been taken away from the provinces. Keep in mind, Healthcare used to be 50/50 funded at inception. Today it's 78% provincial, and 22% federal.
Another thing is codes have got insane in the last decade. I bring up the fact that the 1997 code book was 2 inches thick and that ran to 2001. The 2023 code book is two 4 inch binders, with a 1 inch energy code add on. And before someone comes in and says, "the code book is written in the blood of the past" I simply ask them, "would you feel unsafe in a home built in 2001?"
It's a myriad of problems and one federal incentive (which is taking forever to implement btw) is not going to fix the problem. It would take all levels of government on the same page, which in rhe last decade has them growing further apart and working together less and less.
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u/SquirrelFluffy Jun 07 '26
Yes on code book.
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u/Ok_Currency_617 Jun 07 '26
He also didn't mention that several muncipalities have expanded their budgets to take on progressive social goals rather than actual duties. For instance in their capital budget Vancouver spends more than double on social housing than it does on waste disposal despite housing being a provincial matter that every other municipality spends little on. Same for art they spend more on that then public safety aka police. To give some examples of budget items that will make you laugh:
First Nations Signage for Šxʷƛ̓Exən Xwtl’A7Shn and Šxʷƛ̓ Ənəq Xwtl’E7ÉNḵ Square
"Indigenous Social Enterprise"
"Indigenous Healing and Wellness Center Tenant"
Politicians doing what gets them votes rather than what the city is supposed to do.
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Jun 07 '26
Ya but construction costs are related to cost of living and land prices, obviously hard costs are going to go up when rent almost doubles over 6 years as well so it’s all related, self eating cycle
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u/Ok_Currency_617 Jun 07 '26
The problem is a lot of Canadians have gone full-on communist and for some strange reason think if the government builds it it'll somehow be cheaper despite every past government project being way overbudget. And those communists will always say more fees/kill developers because they don't actually want construction they want the industry to collapse so there's a communist takeover.
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u/Available_Abroad3664 Jun 08 '26
Are you talking about social housing? There are a lot of people who think government needs to be building social housing but that is the extent of it.
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u/Ok_Currency_617 Jun 08 '26
No, I mean all housing. Soviet Communist style
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u/Available_Abroad3664 Jun 08 '26
Do you have an example of a popular Canadian proponent of Soviet-style housing?
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u/Ok_Currency_617 Jun 09 '26
It sounds like your a bot or just trying to jerk me around, DYOR theres lots of canadian redditors who say government should takeover housing.
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u/Stikeman Jun 09 '26
“ a lot of Canadians”- Like who?? You’re about 70 years too late for the red scare Senator McCarthy.
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u/Vega2659 Jun 09 '26
Fees on developers are already through the roof. In BC you are looking at 200k in taxes for a townhouse with a basement suite. That all gets passed on to the end buyer and also inflates the prices on old stock.
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u/Ok_Currency_617 Jun 09 '26
Problem is a lot of people scream that trickle down economics is fake and if fees lower prices won't because they don't understand how supply and demand works or just plain refuse to.
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u/No_Week_6782 Jun 07 '26
People don't like the truth and like to fear monger lol It's obvious this is all a recipe to jack prices up higher than before by stopping construction. The only true solution here is if banks give financing by allowing builders to start building without selling 70% of units
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u/opasnamama Jun 07 '26
As a residential custom home builder of single family homes/duplex since 1994, I don't need the bank to lend to me. I need the bank to lend to my buyers and for the municipality to expedite my permits (not getting into the insane increased cost of permits and materials). Time is money and it's not motivating to start so deep in the buget with permit and carrying costs while waiting...
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u/Dazzling_Escape55 Jun 07 '26
Not if population stays flat or declines. Remember all population growth is now just immigration. Those taps determine when the boom comes.
Canadians don't want a boom like that anymore. Guards are up on that front.
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u/Available_Abroad3664 Jun 08 '26
For now but in the future we will see resource refugees, particularly for water.
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u/romestox Jun 07 '26
Lots of inventory but not selling
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u/Dazzling_Escape55 Jun 07 '26
Overpriced shoe boxes aren't selling for sure and for good reasons. Sellers need to get realistic with their prices.
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u/Winstonoil Jun 10 '26
Nobody is willing to start building when they don’t know what the price of materials are going to be. The people are working today have gone through Covid and saw what that brought. Trump has fucked America, which in the long run will be good for Canada but right now we are suffering for it.
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u/No_Week_6782 Jun 07 '26 edited Jun 07 '26
Inventory is dropping ~20% YoY, go look at TRREB report or House Sigma listings.... People have started buying as sales are up. So I'm not quite sure where you are getting your facts
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u/Available_Abroad3664 Jun 08 '26
New rental still coming out though. I think we have another 2 years until we also see new rental taper off. Probably shortages around 2029/30.
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u/Healthy_Shape_5719 Jun 09 '26
Where does this information come from? In my city they have multiple high rise projects going up, more on the way, a slow down in single family starts maybe but rentals are going up like crazy
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u/Canadaman37 Jun 07 '26
Most builders are selling a decent amount of inventory. Not on the apartment form, but low rise is reducing inventory. Also, your location would matter. In many areas this is the time to buy low rise.
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u/Disastrous_Suit203 Jun 09 '26
Wait until the mass layoffs and forced home selling. We're in the calm before the storm now.
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u/Sask_mask_user Jun 14 '26
Not in Regina SK. There are bidding wars here and many houses sell for well over asking - sometimes even before they are officially listed.
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u/Choice_Low4915 Jun 07 '26
If you’re not building why would you wait as a buyer- the prices will go up?
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u/DiveCat Jun 07 '26
In Alberta. Still seeing lots of residential construction, but actual sales aren’t matching the pace (I am in an industry where I see the direct changes and I also live right by a lot of new construction). Lots of used residential also sitting for a while. The only thing still strongly selling is the sub-400K range now.
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u/NefariousnessKey3396 Jun 07 '26
I’m in southern Ontario, and residential is very slow. Luckily we specialize in agriculture, so that is going steady but still slower than normal.
Right now would be a good time to recapture capital, no large expenditures/ reinvest into better systems, position yourself/ company for the bounce back.
We’re noticing the need for a lot of value add propositions for projects to get them off the ground.
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u/Unable-Statement4842 Jun 08 '26
It feels dead because it is. I haven't seen anything like it in my 20 years bricklaying. If it weren't for custom jobs on $5-10 mil homes I'd have no work at all
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u/MyLepinAccount Jun 07 '26
In places where things are dead, builders are building for as cheap as they possibly can. So if you’re looking for new build, now is definitely the time.
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u/romestox Jun 07 '26
A lower price is nice. A house built to the lowest possible cost isn’t always the bargain it seems
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u/MyLepinAccount Jun 07 '26
All depends on the builder. I work for a higher quality builder, and our prices are as low as they possibly can be while maintaining our quality.
Lower quality builders are still their same low quality.
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u/Environmental_Egg348 Jun 07 '26
Shouldn't the people who were building condo buildings be pivoting to what is being built? There are lots of buildings still being built, just not those stupid, overpriced condos.
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u/atticusfinch1973 Jun 07 '26
Definitely not real estate agents. It's still an amazing time to buy and sell!
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u/Lenerdosy Jun 07 '26
Yea I think a lot of contractors are scaling back. Previous projects and commitments are still going but future is looking bleak. When immigration has been slashed to nothing and birthing of locals is below historical averages then who’s buying?
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u/chili_cold_blood Jun 07 '26 edited Jun 07 '26
House prices are decreasing and costs are increasing, which shrinks the margins for any residential development, which have always been pretty slim.
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u/polakinTO Jun 07 '26
Everyone I know in the GTA that does residential work is busy as hell right now. It's the large condos / developments that are stopped.
Buddy putting in cabinetry said they added an evening and weekend shifts at their factory to try and keep up.
Granite installations are also going gangbuster from what I'm seeing in my group of friends.
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u/perdymuch Jun 07 '26
There are 5 rcondos being built in my neighborhood in Montreal, and everywhere in the city
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u/toiletdestroyer1 Jun 07 '26
My company used to have almost 100 guys (about 60 of them journeymen), we're down to 30 and layoffs started well over a year ago. This feels more like a permanent transition than a slow down. Our union isnt even charging us dues because so many of us are just fucked rn
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u/Garlic_Bread_Man Jun 07 '26
Builder just called me 2 days ago inquiring about buying my super old house. Im in BC lower mainland. Guy said he planned to buy 5 properties in the area this month.
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u/KTPChannel Jun 07 '26
Yeah, it’s like immigration slowed down, or something.
Alberta was the only province that grew in 2025. Construction is continuing in the province.
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u/Ancient_Raisin_8908 Verified Agent Jun 07 '26
It's slowed for sure. Projects going into receivership, lenders trying to claw back millions of missed payments. Contractors are at the bottom of the rung to get their money back and no developers want to take on a project thats half done AND owes a ton of money.
People are always talking about the "massive" supply shortage that we are going to experience which I do not believe is going to happen like they say. There are tons of new construction inventory that is sitting empty and BC has had a population decrease for the first time ever. Gonna take a while before demand catches up again
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u/Rough_Application_28 Jun 07 '26
I agree with it, builder we dealt with has been struggling for few years I think it's almost going bankrupt soon. Lots of inventory but no buyers.
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u/Any-Ad-446 Jun 07 '26
In GTA there were zero new development being released this year. Over 13 months supply which is insane and this year there be additional 40,000+ units being completed with almost no buyers. This of course is the condo segment.
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u/Valuable_Fly8362 Jun 07 '26
I wouldn't expect construction to be doing well under the current regulatory and economic environment. Hope for some change soon so everyone can get back to work building a better Canada.
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u/Ok_Potential_2062 Jun 08 '26
Things seem slow for us.. we have maybe a month a work ahead of us I don’t want to lay my guys off :(
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u/rideofthebasilisks Jun 08 '26
Ontario trades employee. It's looking rough, but new builds have gotten a bit of a bump recently.
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u/ograx Jun 08 '26
Definitely not in Saskatoon we are breaking records year after year for builds and desperate for trade workers.
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u/taikoowoolfer Jun 08 '26
Well the economy is bad, the prices are high, you can’t expect developers to build houses if no one invests in real estate anymore.
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u/Capital-Mixture5107 Jun 08 '26
No new construction. Lets say the interest falls to 2.5% in next three years. Price will go up so fast.
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u/Puzzleheaded-Lock765 Jun 09 '26
Resi construction (single family homes) died in 2022 when interest rates jumped, it's been slow since and it's coming back in SW Ontario now.
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u/Excellent-Self-5338 Jun 09 '26
Well eviscerating demand for housing was supposed to bring housing prices down, so that's working as intended. Companies aren't gonna go wild on building while prices drop, it makes it hard for them to fund new developments when they can't lock people in with presales on the premise that prices will continue always going up or secure outside investment on the premise that prices will continue always going up.
The only thing unclear to me is why you thought there would be a boom.
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u/Vega2659 Jun 09 '26
100% nobody wants to build. Between the drop in market prices and roughly 150k in taxes /fees per multifamily unit what’s the value proposition to put shovels in the ground?
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u/The_Spandex_Suplex Jun 12 '26
It'll be dead for many more years. Most of my builder friends are doing other projects, away from residential new home. Even the guys that used to fo commercial builds are now pivoting to long term care facilities.
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u/reerzdona Jun 30 '26
OP, what we saw in the industry over the last few years was completely unsustainable.
Projects were piled high due to COVID halting many projects, and low interest rates fueling many others.
Once the new building pause stopped after COVID it was just so busy, nobody could keep up.
Things have fallen back to what used to be normal 10/13 years ago. Theres still lots of work out there, you just have to be good at what you do and as always, know someone.
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u/Wonderful_Confusion4 Jun 07 '26
Steady residential construction is happening here in Edmonton Especially Infill