In a Greater Toronto Area (GTA) real estate market packed with opportunity, one question continues to puzzle experts and buyers alike: why are sales of new homes lagging, even when conditions clearly favour the buyer?

Today’s market offers more selection and better pricing than we’ve seen in years. The average price for a new single-family home is down to $1.5 million, an 18% drop since 2022, while condos average around $1 million. Meanwhile, inventory has more than doubled, with over 21,500 new units available. So why aren’t buyers rushing in?

Let’s break it down, and why this window may not last much longer.

What’s Holding Back Buyers?

1. Rising Construction Costs = Price Floor
Despite the dip in prices, we’ve likely hit a price floor. That’s because the cost to build has soared. Between 2019 and 2025:

• Building a single-family home nearly doubled in cost
• Apartment construction costs jumped over 75%

Municipal fees, taxes, and development charges only added to the burden. Builders can’t go much lower without losing money. That’s why prices haven’t dropped further despite weaker demand.

2. Policy Confusion and Buyer Hesitation
Talks in Ottawa about changes to the HST on new homes have added uncertainty. Buyers are pressing pause, waiting for clarity. Thankfully, the federal government has promised retroactive benefits from May 27, which should boost confidence. But many industry leaders, including the Building Industry and Land Development Association (BILD), are pushing for broader support, such as extending rebates to all buyers and applying them to homes up to $1.5 million.

3. Interest Rates Still Weighing Heavily
Although interest rates have eased slightly since their 2024 peak, they remain above the long-term average. And with the OSFI stress test requiring buyers to qualify at 2% above the offered rate, many can’t secure the financing they need. These barriers limit purchasing power, especially for first-time buyers.

Why Low Sales Could Hurt Everyone

Here’s the bigger issue: if sales of new homes don’t pick up soon, the ripple effect could be massive.

• 23,000 fewer homes could be built annually in the GTA
• $10 billion in construction investment may be lost
• 50% of jobs in residential construction and related industries are at risk

New home supply works on a long timeline, sales today lead to new builds in 3 to 5 years. If that pipeline dries up now, future buyers could face even tighter supply and steeper prices.

Why Now May Be the Best Time to Buy

For GTA homebuyers and investors, this may be the most favourable market conditions we’ll see for years:

• Lower prices
• More inventory
• Potential tax savings
• Interest rate relief on the horizon

Those who act now may secure not just a home, but an opportunity. As builders pause and demand returns, today’s deals could look like tomorrow’s steals.

Ready to Explore Your Options?

Don’t let this window of opportunity close. Whether you’re buying your first home, moving up, or investing, the conditions are aligned in your favour.

Follow our blog for more GTA real estate insights, or Contact us today for personalized guidance on buying your next new home.

Stay informed. Stay ahead. Your future home might be waiting.