The only province that comes close to Ontario’s price decline is B.C., which saw a staggering 46 per cent hike followed by an 11.5 per cent fall. 

Most of Canada’s provinces haven’t experienced any price decline after the pandemic.

Nova Scotia’s home prices have continued to skyrocket, up 93 per cent from February 2020 to December 2025. 

Quebec prices are up a whopping 69 per cent in that time. 

Manitoba’s prices have jumped 45 per cent. 

Saskatchewan has climbed 33 per cent. 

And, Alberta has experienced a 38 per cent rise. 

“Ontario is seeing much more of a slowdown compared to other provinces,” said Douglas Porter, BMO’s chief economist and managing director of economics. “Our market went from very hot to suddenly very cold, and much of the rest of the country is not seeing that.” 

While economic growth and positive sentiment about Canada’s economy have dampened across the nation, largely due to trade uncertainty with the U.S., it’s only Ontario that’s experienced a significant price correction and stalled building of new homes since the pandemic. Anchored by a weak condo market in the GTA, the continued price softening and frosty demand leaves Canada’s largest metropolitan area in a precarious position: hardly any new homes will be completed in 2029.

Together, Carney and Ontario Premier Doug Ford say the moves will reduce taxes and fees for a new home in Ontario by up to $200,000. 

But it’s not just stubborn prices of new homes that has led Ontario to be the only province experiencing a significant housing correction. 

Ontario is uniquely positioned to feel a greater housing downturn due to the GTA’s overreliance on investors in the condo market, as well as high construction costs, and greater job loss due to vulnerable sectors impacted by the U.S. trade war. While Ford and Carney’s intervention may spur sales and housing in the new home sector, there’s still too much inventory in the resale market, which cost less than new homes.

“It’s very much the Ontario story where we went from boom to bust,” Porter said. “B.C. is a light version of Ontario but if you speak to people in Quebec or Alberta about a housing correction, they don’t know what you’re talking about.”

Canada’s housing starts made “meaningful gains” in 2025 and rose six per cent to 259,000 units, a recent Canada Housing and Mortgage Corp. (CMHC) report said.

In almost all markets, activity exceeded the 10-year average except for Toronto, where starts fell well below the historical average and reached the lowest per-capita level among the seven large census metropolitan areas, the report added.

Calgary hit a fourth consecutive record high in housing starts in 2025, and surpassed Toronto for the first time. 

Rental housing was the dominant driver of new supply, leading to an increase in medium-density housing due to favourable rezoning and plenty of land to develop at reasonable cost, the report said. 

In addition, population growth has boomed in the province which has seen relatively firm job gains.

“Calgary has benefitted from very positive net migrations to the city,” said Kevin Hughes, deputy chief economist at CMHC. “Whereas Toronto, we were seeing more and more people priced out.”

Some of that migration is coming from Ontario, which has seen an increase in younger people leaving for other parts of Canada over the last several years. At the same time, the federal government has enforced tighter immigration targets, drying up demand from newcomers and students. 

Ontario also faces unique challenges, especially because it’s front and centre in the trade war with the U.S. 

“We have the auto industry here, mostly the steel industry too, we’re really the province that is most impacted by trade uncertainty,” Porter said. 

Ontario’s unemployment rate was 7.6 per cent in February, above the national average of 6.7 per cent, according to Statistics Canada’s Labour Force Survey. 

The only other province to see a decline in home prices since the 2022 peak is B.C. with an 11.5 per cent fall, which isn’t close to Ontario’s price drop. 

“We asked ourselves, why isn’t B.C. down as much (for prices) as Ontario?” said Shaun Cathcart, senior economist at the Canadian Real Estate Association (CREA). “You would think that it would be the most expensive markets that are hit the hardest, but some markets are so expensive that they’re beyond that.” 

In Metro Vancouver, the overall average home price is higher than Toronto, and many buyers for detached single-family homes aren’t the type of buyers “going to the bank to get a mortgage,” Cathcart said.

But Vancouver’s condo market has also fared better than Toronto’s. 

In the Greater Toronto and Hamilton Area, during the height of the housing market in 2021 and 2022, condo presales skyrocketed resulting in record levels of completions in 2024 with almost 30,000 units, and more than 29,200 units in 2025.

But as interest rates climbed and condo values dropped, investors fled the market. With the main buyer for condos gone, presales tanked and builders no longer have the capital to build, resulting in just over 1,000 unit completions forecast in 2029. 

The GTA’s condo average sale prices has dropped by 21 per cent since the peak, making it an unfavourable market for builders. 

But it’s not the same story in Vancouver, another hot pandemic-time market for condos.

Condo benchmark prices there have dropped by nine per cent since their peak in April 2024, according to CREA. 

Part of the reason Vancouver’s market has performed better is that there are more end-users for condos compared to Toronto, because property prices are higher — making condos the most attractive and attainable option for purchasers. 

“Condo sales make up about 50 per cent of home resales in the Greater Vancouver Area whereas they are roughly 30 per cent of resales in the GTA,” said TD economist Rishi Sondhi. “So more people in Vancouver likely use their units to live in as opposed to just rent out.”

Toronto’s reliance on investors has also led to a “supply issue,” Sondi added. 

Changes to investor demand — the pandemic-era influx followed shortly by their desertion of the space — has led to the market to experience 27 months of inventory for new builds, the amount of time it would take to sell inventory on the market based on current demand. A healthy market level is around nine to 12 months.

Because Vancouver’s market isn’t as investor-driven, there aren’t the same supply and demand issues, Sondhi added. 

Builders have, for years, called on governments to reduce development charges, arguing doing so would allow them to lower prices for buyers and build more.

On Monday, the federal government and Ontario said they will cost-match a total of $8.8 billion over 10 years, focused on housing infrastructure projects. This funding will support the reduction of municipal development charges by up to 50 per cent — reductions that will be in place for three years and target municipalities covering 80 per cent of the province’s population.

“They have become a major hurdle in the Ontario housing market,” Carney said during the press conference on Monday. “In recent years, they have been growing at an unsustainable rate — increasing the cost of every new home, compressing margins, and stalling new builds. Cutting development charges was a key commitment of our housing plan.”

Reducing development charges could alleviate some pressures in Ontario’s housing market, by reducing the cost to build, and in turn leading to a lower price tag for buyers, which would helping to spur more homebuilding.

But it may not be a quick fix.

“Ultimately this will help get more new homes sold and under construction, but we still have a backlog of excess supply to work through,” as the resale market is clogged and full of inventory at a lower cost compared to new builds, said BMO senior economist Robert Kavcic.

In the meantime, developers are also turning to rental building due to government incentives, and small-scale projects, as they require less capital and shorter timelines. 

Experts say this is a positive move, as strong rental construction will help offset the drop in new build construction. But it won’t be enough to prop up the market, said CMHC’s Hughes. 

There also needs to be healthy owner-occupied supply at affordable prices coming to the market as well, as the current lack of building in that sector will hurt supply in years to come. 

For Ontario’s real estate market to recover, prices need to stabilize and buyer confidence needs to return. While the hope is that the HST rebate and development charge reduction will boost sales and buyer confidence in the new home space, geopolitical tensions and economic uncertainty will continue to deter people from making massive purchases such as a house. 

“Uncertainty is holding back investment in housing, but also consumer spending, which bleeds into home buying,” said Hughes.