The Great Real Estate Disconnect, Part II: Report Card Exposes Canada’s Housing Mirage

 

A Market in Freefall

The illusion is over. For years, politicians, developers, and industry lobbyists have sold Canadians the fantasy that housing targets would solve our affordability crisis. They claimed supply was coming, affordability was on the horizon, and economic stability was just around the corner. The Q2 2025 GTA and Greater Golden Horseshoe Housing Report Card has blown that narrative to pieces.

Across 34 municipalities, housing starts are down 40% compared to the 2021–24 average. Condo starts plunged 54%, ground-oriented homes dropped 42%, and even pre-construction sales—a forward indicator—collapsed by 89% for condos and 70% for ground-oriented homes. The pipeline is empty. The promises are hollow.

A Failing Grade for Governments

Of the 34 municipalities studied:

• 22 received an F.

• 5 scraped by with a D.

• Only 7 managed a C or better.

Toronto, the country's economic engine, failed spectacularly, with 10,209 jobs lost due to reduced starts and a 67% shortfall against housing targets. Brampton, Vaughan, Newmarket, Innisfil, and Hamilton all cratered. Newmarket managed just 2 housing starts against a 600-unit target. This isn’t underperformance—it’s collapse.

I. The Housing Mirage in Numbers

• Housing starts across 34 GTA & GGH municipalities are down 40% in 2025.

• Condo starts: -54%, ground-oriented: -42%, sales: -70–89%.

• 22 municipalities failed outright (F grades), including Toronto, Brampton, Vaughan, and Hamilton.

• Employment impact: 24,195 person-years of construction work lost.

• Toronto alone: 10,209 jobs gone, 67% below housing targets.

👉 The Report Card proves Canada’s housing crisis is not easing—it’s imploding.

II. The Hidden Side of the Disconnect: Assessed Value vs. Market Hype

Even as starts collapse, sellers and agents inflate the prices of what little housing exists.

• MPAC and provincial bodies assess properties to set taxes.

• Yet when homes sell, those valuations are ignored—listings run double or triple the government’s value.

• Example: $600,000 assessment → $1.2 million listing, no upgrades. That’s not market forces—it’s a con.

And the kicker? Taxes don’t update right away. Owners of multimillion-dollar homes often pay taxes based on 2016 values, while new buyers shoulder speculative prices. The result is systemic unfairness and lost public revenue.

III. Case Studies in Distortion

• Two Homes, Same Street: both sell for ~$1.2M, but one buyer pays $500 less in tax because assessments lag.

• Frozen Assessments: Ontario hasn’t updated valuations since 2016, despite prices doubling.

This is the quiet scandal: the government has the system to ensure fairness but refuses to enforce it, leaving taxpayers overpaying mortgages while speculators profit.

IV. Winners, Losers, and the Mirage

• Winners: Agents (commissions), speculators (flips), banks (bigger mortgages), and governments (land transfer taxes).

• Losers: Young buyers, seniors downsizing, immigrants, renters—those simply seeking shelter.

• Illusion: Politicians boast about “supply targets,” but cities are missing them by 70–90%. Meanwhile, the properties that do sell are listed at fantasy prices, detached from assessed value.

V. A Modest Proposal: Reconnect Value to Values

1. Force listings to show assessed value.

2. Cap sale prices at 3–5% above assessment unless justified by renovations or rezoning.

3. Apply penalties for unjustified price inflation.

This isn’t anti-market—it’s pro-transparency. It stops speculation from masquerading as “market dynamics.”

VI. Conclusion: Time to Wake Up

Canada’s housing system is now a two-tiered hustle:

• On one side, a collapsing supply and vanishing construction jobs.

• On the other hand, wildly inflated sale prices are disconnected from the government’s own valuations.

The Great Real Estate Disconnect is no longer a warning. It’s a reality—and the 2025 Report Card confirms it. Unless governments enforce fairness and transparency, Canada will remain trapped in a housing mirage where the public pays the price and speculators always win.