Ontario’s new home construction pace is increasing, but still falls short of the government’s goal of 1.5 million homes by 2031. The budget shows that the number of new homes is expected to reach nearly 88,000 in 2024.
Ontario’s budget projections show a steady rise in private sector forecasts, reaching 95,800 homes by 2027.
However, the province needs to build at least 125,000 homes this year and 175,000 per year to reach 1.5 million homes.
The Progressive Conservative government met 99 percent of last year’s target by counting long-term care beds as homes, with nearly 10,000 created last year.
NDP Leader Marit Stiles accuses the government of artificially inflating housing statistics through long-term care, misleading Ontarians into believing it’s being built quickly enough.
Finance Minister Peter Bethlenfalvy acknowledged that housing starts are not where he hoped, but emphasized high interest rates as a significant factor in reducing construction. He remains committed to finding more ways to build more houses.
The budget includes $1.6 billion for housing-enabling infrastructure, allowing municipalities to build infrastructure like water lines and roads. Municipal Affairs and Housing Minister Paul Calandra is expected to introduce new legislation to boost housing supply.
Premier Doug Ford has criticized four-, six, or eight-story buildings in neighborhoods. The government is also allowing municipalities to offer reduced property tax rates on new multi-residential rental properties to encourage more housing construction.
Ontario’s budget outlines plans to allow municipalities to impose vacant home taxes, increasing housing supply. The province is also investing $155 million to boost a construction funding subsidy for long-term care homes and $152 million to support homeless and mental-health residents. The resale market is facing challenges due to high interest rates, with sales dropping 12.3% in 2023 and the lowest volume in over 20 years.
The government predicts a 4% growth in the resale market in 2024, followed by a 16% increase in 2025, despite the average monthly mortgage carrying cost being $4,600, higher than the 1980s peak.