What a drop in new building permit values means for your hopes to buy a home
Global News
The value of Canadian housing permits fell for the first time in 15 months, as developers are faced with higher costs to build and may need more from the government to meet demand.
Real estate developers pulled back on plans to build in Canada for the first time in 15 months, with plans to build new homes showing the sharpest drop among property categories.
This means there could be even fewer homes available for would-be buyers in the near future, which could drive up prices unless developers show more intention to build.
“We’ve reached a point where home building costs have gotten so high relative to the price of homes that it’s just not viable to build — particularly in the Greater Toronto Area. The condo market is all but dead, but the report also shows that it’s on the single-family home,” says Mike Moffatt, founding director of the Missing Middle Initiative at the University of Ottawa.
“My big concern is that if we go through a period of two or three years where we’re really not building that many homes, and once the economy gets better, all of those buyers who are on the sidelines are going to want to go out and buy, and there’s not going to be a lot of inventory for them and we might start to see big price increases again.”
Statistics Canada reported on Tuesday that the total value of approved building permits in June decreased by nine per cent to $12 billion, compared to $13.1 billion in May, which was a stronger month for growth in Canadian permit values.
The value of permit applications indicates real estate developers’ intentions to build in the near future.
The agency says that with June’s report capping off the second quarter of 2025, it also marked the first quarterly decline following five consecutive increases, or 15 months.
Although the intention to build non-residential projects such as office buildings and warehouses led the decline in permit values for June, the second quarter of the year, spanning from April to June, showed the value of residential units as a whole fell the most.
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