The Toronto real estate market appears to have stalled with the number of projects currently paused due to regulatory or financial issues outnumbering active projects by a factor of four, a new report suggests.
CivicAction found that while there were 481 active projects in the GTHA in the second quarter of 2025, more than four times that number were approved but on hold.
It amounts to 2,220 projects made up of 1,218,626 units that were slated to be built but haven’t yet made any progress.
In what it called a “rental market paradox,” CivicAction found in its October report that new rental buildings are only at 50.3 per cent occupancy “despite documented workforce housing need. CivicAction said this suggests a “pricing mismatch” for middle income renters.
“We’ve been very successful in approving housing, but we’re very unsuccessful in actually building,” CivicAction CEO Leslie Woo told CTV News Toronto in an interview. “For every 12 housing projects that are approved, only one is with a shovel actually in the ground.”
Market slowdown
The report from CivicAction comes on the heels of another report from real estate analysis firm Urbanation pointing to a significant slowdown in the condo market.
Urbanation said that the GTHA new condo market is on track to record its worst year for sales in 35 years.
They went on to explain that 2,499 units across 10 projects will not be built this quarter due to project cancellations. That brings the total number of cancelled condo projects this year to 18, encompassing 4,040 potential units, according to their research.
“The condo market has clearly become depressed as it undergoes a difficult correction following excessive growth that emerged during the COVID-19 pandemic,” Shaun Hildebrand, Urbanation’s CEO said in their report. “However, the lack of activity occurring today will surely lead to a lack of supply in a couple years, helping to restart the engine for the market.”
Urbanation found that condo prices in unsold units averaged at $1,199 per square foot this quarter, down 3.5 per cent from last year and 9.6 per cent from 2023. The real estate agency points to the “ongoing difficulties developers face with lowering prices to become competitive with resale units,” which they found were at $867 per square foot for recently completed resold units.
Restarting the heart
CivicAction, meanwhile, suggested that although banks and developers have “large amounts of development capital,” they rely on lending models that fit best with luxury development that focuses on high-income buyers. That leaves a gap in the market for “the middle-income workforce segment that requires moderate returns on patient capital,” their report said.
“As of March of this year, there’s only a two per cent increase in housing starts, despite over $40 billion in federal funding,” Woo said.
“More money alone is clearly not going to solve the problem. It’s really a system transformation that is needed.”
CivicAction’s report highlighted the “invisible poor”—people who make too much to qualify for financial assistance but feel the squeeze when affordability issues arise. Woo warned that these people—working a variety of careers from educators to construction workers—will leave if “we are not able to ensure they have affordable housing.” Some people in this bracket are already leaving, Woo added.
CivicAction found construction labour shortages were already affecting construction capacity and also reported shortages across all trades. The depressed housing market is affecting the labour market as well, Woo explained.
“So many employers are talking about the fact that a lot of their ability to attract or not being able to attract talent is because they can’t afford to live in the GTA,” Woo said.
‘Partnership from many’
Instead of waiting for the market to kickstart after supply levels out, as Hildebrand suggested, CivicAction called for stalled projects to be taken over by different interests, such as non-profit groups and major employers.
“Its not like we’re reinventing some kind of wheel,” Woo said. “This is going to have to be a partnership from many, not just one-to-one.”
The federal government is also signaling the need for lower home prices. Federal Housing Minister Gregor Robertson told the House of Commons finance committee Monday that average prices in Canada need to come down through the construction of more affordable housing. He said a new federal bill will waive up to $50,000 in federal taxes on the cost of a new home for first-time homebuyers.
With files from The Canadian Press