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The narrative that certain big cities are the only ones hit by slowing new home sales is false, says economist Mike Moffatt, founding director of the Missing Middle Initiative (MMI) at the University of Ottawa.

“There’s a belief out there that the weakness right now is isolated to downtown Toronto and downtown Vancouver primarily,” he said during a presentation on the state of the nation at the recent annual general meeting of the Residential ��������ion Council of Ontario (RESCON).

“But that’s not true. It’s not just condos and it’s not just Toronto. We’re starting to see this as well across Canada.”

Moffatt told the audience the MMI, a research think-tank that focuses on policy solutions to improve housing affordability, is trying to change the message and set the record straight.

He said data is showing places like Calgary and Edmonton are also showing slower sales.

Demand is down across the board, he said, as the cost of building new units is too high to compete with the resale market.

Moffatt presented data from a recent housing report card done for RESCON that showed new ground-oriented and apartment condo sales in both Toronto and the region of Kitchener, Waterloo and Cambridge have plummeted over the past five years.

In Toronto, for example, sales of new ground-oriented and apartment condo sales declined steadily from around 40,000 in 2021 to around 2,000 in 2025. In Kitchener, Waterloo and Cambridge, they dipped from 2,000 in 2021 to 250 in 2025.

The report examined 34 separate municipalities across nine separate metro areas in the GTA and Greater Golden Horseshoe and assessed the state of housing sales and construction over the first nine months of the year, relative to the first nine months of the previous four years.

Condo apartment starts were down 51 per cent and ground-oriented housing decreased nearly 43 per cent in almost every municipality – showing the region’s housing weakness extends well beyond the condo market.

Based on the state of new home sales, the report indicated things are going to get worse before they get better.

Meanwhile, Moffatt noted the latest figures from the Building Industry and Land Development Association (BILD) are an eye-opener.

Indeed, a recent report by the organization showed Toronto-area new home sales have tanked to their worst year on record.

“This is the worst sales that they’ve seen in 45 years’ worth of data and it’s the worst numbers that they have and that’s going back to 1981,” Moffatt told the audience.

According to the BILD report, the situation is dire and the consequences are rippling through economy of Ontario.

There were just 5,300 sales in the GTA in 2025 and 2026 doesn’t look much better due to geopolitical concerns and the Bank of Canada indicating the cycle of interest rate cuts has ended.

Moffatt said resales aren’t doing much better, with the Toronto Regional Real Estate Board reporting the 12-month moving average for resales has been on a steady decline since 2021.

He explained the current lack of demand is driven by interest rates, beliefs on the future path of prices and rents, economic conditions and uncertainty and population growth.

The big problem with building, he noted, is there hasn’t been a proportional reduction in building costs. Prices have come down about 20 per cent in the last few years but costs have not.

Moffatt said economic conditions could get so bad as to drive costs down, but the challenge right now is that building costs are presently escalating.

Market forces could also eventually drive costs down, but they’re likely not going to get low enough, he added.

Moffatt laid out 10 ways governments could lead the way.

Improving the approvals system, lowering hard costs and reducing land costs, as well as slashing government fees like development charges, and keeping interest rates low would help, he said.

Reducing the duration of construction projects, de-risking projects and cutting the HST on ventures would also help, he said, as well as deferring fees and killing the tax-on-tax that builders pay on materials, and services.

As for the future, Moffatt envisions two possibilities.

In one scenario, there is a low volume of housing construction with a high cost. The other is a high volume of construction with a lower cost.

RESCON president Richard Lyall told the meeting the report produced by Moffatt is invaluable as it enables the association to determine exactly what’s happening in specific municipalities in Ontario.

“Some municipalities have been better than others and that’s the reality,” he said.

The numbers in the housing report card were so restrictive and disturbing and a reflection of governments waiting to pull the trigger, noted Lyall.

His message to governments?

“Fire all your guns at once,” he said. “It’s time. We can’t wait any longer.”