The shortage nobody is planning for is in 2029
Housing starts are slowing, pre-construction has frozen, and the buildings that answer the next decade’s demand are the ones not being launched now.
CMHC expects housing starts to slow through 2026 and to decline more significantly in 2027 and 2028. In the condominium market the leading edge of that is already visible: no new project launched in the Greater Toronto and Hamilton Area in the first quarter of 2026, the first quarter in at least thirty years with none.
The lag is the whole problem
A high-rise sold today completes in roughly four to five years. That means the supply arriving in 2029 and 2030 is decided by launches happening — or not happening — right now, at the moment when the market looks most oversupplied and the case for building looks weakest.
This is the ordinary shape of a construction cycle rather than a failure of anyone’s judgment. Builders launch when units sell; units are not selling; so builders do not launch. The consequence lands on a market five years out that has no way to respond quickly.
What is being done about it
The development-charge reductions announced this year are aimed exactly at this: lowering the cost of building at the point in the cycle when projects stop working. Whether a $48,000 saving on a two-bedroom apartment is enough to restart launches is the open question of the next eighteen months, and the answer will be visible in launch counts long before it is visible in prices.
Both halves of this are worth holding at once when reading today’s conditions: the market is genuinely oversupplied now, and the pipeline behind it is genuinely empty.
Sources
- CMHC — Housing Market Outlook, Summer 2026
- RBC Economics — Navigating Toronto’s frozen pre-construction condo market
Figures are as reported by the sources above on the date of publication. Nothing here is advice about a particular property or a particular household — for that, ask someone who can see your circumstances.