Ontario’s residential construction sector is facing one of the most severe downturns in its history, with far-reaching consequences for the economy, workforce and future homeowners. A convergence of soaring costs, market uncertainty and policy pressures has pushed housing construction toward a near standstill at a time of urgent demand.

The data is stark: Single-family home sales in the Greater Toronto and Hamilton Area have fallen by more than 70 per cent, condominium sales by nearly 90 per cent and housing starts have dropped sharply, down 29 per cent outside Toronto and 58 per cent within the city. With forecasts suggesting the province could lose up to 2.5 per cent of GDP in 2026 due to the slowdown in residential construction, the paralysis gripping the housing sector is no longer just a housing issue but a growing economic risk affecting jobs, investment and long-term affordability across Ontario.

Fergus and Guelph

A collaborative conversation about housing supply, affordability and construction innovation took centre stage recently as industry leader, Reid’s Heritage Homes welcomed provincial and municipal leaders for a tour of two of its active communities in southwestern Ontario.

The visit brought together members of the Reid’s Heritage Homes executive team, Ontario Minister of Municipal Affairs and Housing, Robert Flack, Guelph MPP Mike Schreiner, and Mayor of Centre Wellington Shawn Watters.

The tour began in the Centre Wellington community of Fergus at a recently completed Reid’s Heritage Homes townhouse development featuring 112 homes designed to support first-time buyers and young professionals seeking attainable housing options, currently selling in the mid-$400,000s. Four newly completed model homes highlighted a range of contemporary floorplans and functional design features that balance quality, efficiency and everyday livability.

From Fergus, the group travelled to Argyle Village in Guelph, Reid’s Heritage Homes’ newest community, where more than 150 townhomes are currently under construction. Together, the two developments highlight the company’s broader strategy to increase housing supply in a region where demand continues to outpace availability for attainable new homes.

Addressing a growing affordability challenge

Across Ontario, rising costs and limited inventory have made it increasingly difficult for many buyers, particularly first-time purchasers, to access well built, affordably priced homes. Reid’s Heritage Homes notes that its communities are intentionally designed to address this gap through efficient layouts, thoughtful community planning, and attainable price points that help make homeownership more achievable in today’s market.

Reid’s Heritage Homes is currently active in eight communities across southern Ontario and constructing more than 1,100 homes, reflecting nearly five decades of experience in residential development and community building.

Focus on faster construction through innovation

A key theme of the site visit was how the homebuilding industry can accelerate timelines without compromising craftsmanship or safety. During the tour, company leaders discussed the role of prefabrication and streamlined construction practices in improving efficiency and consistency on site.

Working closely with trade partners, Reid’s Heritage Homes has increasingly incorporated prefabrication techniques to reduce onsite build time while maintaining design flexibility and construction quality. Company representatives noted that these methods help create more predictable schedules, an important factor in delivering homes to market sooner. For example, communities in Fergus and Guelph utilized prefabrication to complete construction within 12 months, reducing the overall schedule by approximately 20 per cent which in turn lowered costs by hundreds of thousands of dollars.

Policy and industry pressures remain

While innovation is helping to improve speed, efficiency and costs, Reid’s Heritage Homes stressed that broader structural challenges continue to affect affordable housing delivery across southwestern Ontario.

Among the key issues discussed were development charges and HST on new construction, both of which significantly increase the cost of delivering new housing and are ultimately passed on to the homebuyer. These layered costs can represent a substantial portion of the final price of a new home, making it increasingly difficult to deliver attainable housing even when demand is strong. Reid’s Heritage Homes also emphasized that lengthy and complex approvals processes continue to delay projects, extend construction timelines and introduce additional carrying costs, uncertainty and risk. Together, these structural pressures are slowing the pace of new housing delivery, discouraging investment and limiting the industry’s ability to respond quickly to the province’s urgent housing supply needs.

Collaboration

Reid’s Heritage Homes’ executive team expressed appreciation for the engagement of Minister Flack, MPP Schreiner and Mayor Watters, while urging continued and decisive collaboration between builders, policymakers and municipalities to address Ontario’s housing challenges.

“We urge all levels of government, provincial and federal, to consider targeted measures such as removing HST on new homes to better align with the resale market and reassessing development charges that significantly impact the cost of delivery,” says Reid’s Heritage Homes President Ron McMillan. “Practical, balanced reforms like these can help accelerate housing supply, improve affordability, and support attainable homeownership for families across Ontario.”

Looking ahead

Reid’s Heritage Homes’ message remains clear: Meaningful progress will require decisive collaboration between provincial and federal government, and industry and community stakeholders to remove barriers, streamline approvals and create the conditions necessary to build at scale. By accelerating timelines, reducing structural cost pressures and prioritizing policies that support attainable housing, the region can expand access to homeownership across southwestern Ontario while also protecting the thousands of jobs tied directly and indirectly to the residential construction sector. At stake is more than housing supply. It is the ability for families to put down roots in the communities where they work, to sustain local employment across trade and supply chains, and to preserve the economic stability of the Greater Golden Horseshoe, which depends heavily on a strong and active homebuilding industry.