When the federal government released its 2025 Budget on November 4, one line on page 44 immediately stood out to Canada's housing industry: "Home sales have risen in five of the past six months."

For builders watching their sales collapse to historic lows, that statement felt disconnected from reality. Because while existing home sales through MLS Systems have shown modest resilience, new home sales, the homes being built today that will become tomorrow's housing supply, have fallen off a cliff.

In September 2025, there were only 438 new home sales across the Greater Toronto Area, according to data from Altus Group shared by the Building Industry and Land Development Association. That's down 29% from September 2024 and 80% below the 10-year average.

For comparison, a typical September in the GTA would see around 2,233 new home sales based on historical averages. This September saw 438. That's not a slowdown. That's a collapse.

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Just 53 Condos Sold in Toronto in September

The condo market is even worse. Just 155 condo units were sold across the entire GTA in September, down 44% from September 2024 and 90% below the 10-year average.

In Toronto specifically? Fifty-three condos. That includes 10 sales in Etobicoke, 10 in North York, and 28 in Old Toronto.

"New home sales across the GTA stumbled to another record low for the month of September," said Edward Jegg, Research Manager at Altus Group. "In fact, new home sales are down year-to-date across all the markets tracked by Altus Group led by Toronto, Vancouver, Calgary, Hamilton, and Kitchener-Waterloo where sales have fallen by over half compared to last year."

The single-family market isn't much better. Just 283 single-family homes sold in September, down 16% from last year and 61% below the 10-year average.

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The Problem Is National, Not Regional

BILD and the Large Urban Centre Alliance have been warning for months that this isn't just a GTA problem. It's spreading.

Year-to-date new home sales have declined sharply across Canada's largest municipalities compared to the 10-year average. Single-family and condominium apartment sales are both down 82% in the GTA, 81% in the Greater Golden Horseshoe, 67% in Vancouver, 40% in Calgary, and 33% in Edmonton. In Montreal, condominium apartment sales have fallen by 75%.

"With pre-construction inventory dropping dramatically, the signs are clear that the new residential sector in the GTA is basically stopping," said Justin Sherwood, Senior Vice President of Communications, Research, and Stakeholder Relations at BILD. "Greater Vancouver is seeing a third of its normal activity and will be soon in a similar place, many other Ontario markets like Ottawa and the Kitchener-Waterloo area are struggling, and we are now seeing even some troubling signs in Calgary."

Why the Federal Budget Got It Wrong

The discrepancy points to a data problem. The federal budget appears to be drawing on statistics where "home sales" refers to total sales, including resale homes, rather than new home sales.

That might explain why the numbers appear more positive. Resale activity through MLS Systems has been relatively stable, even showing modest growth in some months. But those are existing homes that were built 10, 20, 50 or more years ago.

For a government that has promised to deliver 500,000 new homes annually, tracking progress toward that goal using resale data makes no sense. You can't add supply with homes that already exist.

"If the aim is to spur new construction, to add supply for a growing population and support the jobs the sector provides, surely the focus must be on net new construction?" BILD asked in their response to the budget.

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Forward-Looking Indicators Are Backward-Looking

Page 44 of the budget also states that "forward-looking indicators point to broadly balanced market conditions at the national level." But that raises questions about what indicators the government is actually watching.

New home sales today are the foundation for housing starts tomorrow. When sales fall, future construction follows suit, but at a lag of 1.5 to 3 years or more. Put another way, starts are a measure of sales that occurred in the past. They're backward-looking, not forward-looking.

These declines represent an industry-wide slowdown that threatens to deepen the supply gap for years to come. Every project delayed today translates into fewer homes being started and completed in the future.

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The Real-World Consequences

When the federal government assures Canadians that the market is "broadly balanced," it sends the impression that there's no crisis to confront, and therefore no urgency to act.

Yet the companies building homes see a very different reality. Evaporating sales, projects on hold, layoffs underway, and financing drying up. Every indicator from the new home market points to a deepening crisis, not stability.

"The market downturn we are experiencing is historic and will have long-term consequences for housing affordability, the jobs that are provided by our sector, and the economic activity and revenue generated by the new residential construction sector across the country," said Justin Sherwood, Chief Operating Officer of BILD.

The building and renovation industry provides 256,000 jobs in the GTA region alone and $39.3 billion in investment value. When new home sales collapse, those jobs are at risk.

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Inventory Is Piling Up Despite Plunging Sales

Despite the sharp drop in demand, total new home inventory in the GTA fell slightly to 21,749 units, including 15,875 condominium apartment units and 5,874 single-family homes.

But here's the problem. That represents a total inventory level of 22 months based on average sales for the last year. That's the highest inventory level on record, according to Altus Group.

In a healthy market, inventory represents about three to six months of sales. When inventory hits 22 months, it means supply is massively overshadowing demand. Developers can't move units. Projects can't proceed. Financing dries up.

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Prices Are Hitting Apparent Floors

The benchmark price for new condominium apartments in September in the GTA was $1,033,317, flat versus 2024 and remaining at an apparent price floor.

The benchmark price for new single-family homes was $1,437,447, down 8.2% over the last 12 months.

An "apparent price floor" means developers can't lower prices further without losing money on the project. They're already selling at or near cost in many cases. If demand doesn't recover, projects simply won't proceed.

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What BILD Is Asking For

BILD has been advocating for three specific policy interventions:

First, temporarily suspend the GST on all new homes under $1 million for rapid implementation. The federal budget included a GST rebate for first-time buyers, but BILD argues it should apply to all new home buyers to stimulate demand across the board.

Second, rapid implementation of provincial development charge reforms. The federal government promised to work with provinces to reduce development charges by 50%, but that commitment hasn't materialized yet.

Third, municipalities must lower the fees and charges they add to new homes. Development charges, parkland levies, and other municipal fees can add $100,000 or more to the cost of a new home in some markets. Those costs get passed to buyers, making affordability worse.

"Now is not the time for half measures," Sherwood said.

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The Supply Crisis Nobody's Talking About

Here's the paradox. Canada has a housing shortage. We need 500,000 new homes per year to keep pace with population growth and address the existing deficit. But builders can't sell the homes they're trying to build.

That's not a supply problem in the traditional sense. It's an affordability problem. Buyers want homes. Developers want to build homes. But the math doesn't work. New homes are too expensive relative to incomes, financing costs, and resale alternatives.

"Forget achieving the federal government's goal of 500,000 homes per year," Sherwood said. "Over the next few years it will be a stretch to keep annual housing starts in the 200,000 range."

If new home sales remain at current levels, starts will inevitably fall. Projects that would have broken ground in 2026 and 2027 won't proceed. The supply shortage will get worse, not better, because the pipeline of new construction is drying up.

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How This Affects Real Estate Markets

The collapse in new home sales has ripple effects beyond just the construction industry.

For buyers, it means less supply coming online in future years. That puts upward pressure on resale prices as buyers compete for existing homes because new supply isn't materializing.

For investors holding pre-construction condos, it means closing on properties that may be worth less than the purchase price. Many are trying to sell assignments, flooding the market with additional supply that further depresses prices.

For homeowners, it creates uncertainty about values. If new construction collapses, will resale prices follow? Or will limited supply keep resale prices elevated even as new home values fall?

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How Coldwell Banker Horizon Realty Can Help

At Coldwell Banker Horizon Realty, we understand that the divergence between new home markets and resale markets creates both challenges and opportunities. Whether you're evaluating pre-construction options versus resale, trying to sell an assignment, or wondering how new construction trends will affect your neighborhood's property values, we provide the expertise and local market knowledge you need.

Understanding the difference between what government statistics say and what's actually happening in new home markets requires professional insight from people who track market conditions daily.

Contact Coldwell Banker Horizon Realty today to discuss how the collapse in new home sales is affecting your area and what it means for your real estate decisions, whether you're buying, selling, or investing.

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The Bottom Line

The federal budget says home sales have risen in five of the past six months. That's true if you're talking about resale homes. It's completely false if you're talking about new home sales.

New home sales in the GTA are down 80% from the 10-year average. Just 53 condos sold in Toronto in September. The pattern is similar across Vancouver, Calgary, Edmonton, and Montreal.

This isn't a regional blip. It's a national crisis in new home construction. And it's being masked by resale data that doesn't reflect what's actually happening in the new construction market.

BILD is right. If you want to know if the Leafs are winning, you don't watch the Raptors game. And if you want to track progress toward building 500,000 new homes annually, you can't use resale data.

The federal government needs to start watching the right game. Because the one that actually matters, new home construction, is being lost badly. And the longer policymakers ignore that reality, the worse the housing shortage will become.