Ontario Pre-Construction Market Note: Rates, Starts & Policy — August 2026

Ontario Pre-Construction Market Note — August 2026

Rates are on hold, the new-condo pipeline is thin, and two affordability measures are live but municipality-specific. Here's the source-backed read for Ontario pre-construction buyers and investors this week. Nothing here is a forecast or a promise of returns — just what's on the record.

Rates: a sixth hold at 2.25%

<cite index="4-1">The Bank of Canada left the target for its overnight rate unchanged at 2.25% for a sixth consecutive decision in July 2026.</cite> <cite index="5-2">The Bank Rate remains at 2.5%, while the deposit rate is 2.2%.</cite> <cite index="2-5,2-6">Canada's economy is showing signs of improvement, with growth picking up and inflation projected to ease gradually from its recent spike.</cite>

For buyers mapping out closing timelines and mortgage renewals, the next data point is close: <cite index="5-9">the next interest rate announcement from the Bank of Canada is scheduled for Sept. 2, 2026.</cite> A hold doesn't change fixed-rate contracts already in force, but it keeps the near-term cost of variable borrowing where it's been.

CMHC: condo starts remain the soft spot

Supply is the headline for pre-construction. The national picture:

• <cite index="9-11">The six-month trend in housing starts was down in June compared to May, with a decrease of 2.8% to 248,123 units, according to CMHC.</cite>
• <cite index="9-13">Actual monthly housing starts were down 13% year-over-year in centres with a population of 10,000 or more, with 20,265 units recorded in June, compared to 23,292 units in June 2025.</cite>
• For the GTA, <cite index="9-7">Toronto starts increased 25% due to higher multi-unit starts.</cite>

On the pipeline, CMHC is candid about where the strain is: <cite index="13-12,13-13,13-14">condominium starts will be particularly weak, especially in Toronto, where pre-construction sales fell to multi-decade lows in 2025; many projects are delayed or cancelled as financing thresholds are harder to meet, and developers are focusing on completing projects already underway rather than starting new ones.</cite> <cite index="13-15">Ontario overall housing starts are projected to fall to near two-decade lows in 2026, driven by very low condominium pre-construction sales.</cite>

Two dates and a caveat worth flagging:

• <cite index="16-5,16-6,16-7">CMHC is conducting a methodology review of the unabsorbed inventory data series in the Ontario context, with updates to follow, and asks that the data be used with caution in the meantime.</cite>
• <cite index="10-10">CMHC will release the July housing starts data on August 18.</cite>

Policy: the HST break and development-charge cuts

Two affordability measures remain relevant to buyer math.

On the tax side: <cite index="20-13,20-14">Ontario announced plans to temporarily remove the HST for buyers of new homes — the 13% tax removed from new homes valued up to $1 million from April 1, 2026 to March 31, 2027.</cite> The federal rebate layers on top: <cite index="23-1">the maximum rebate of $130,000 would be maintained for new homes valued up to $1.5 million, and would decrease proportionally from $130,000 at $1.5 million to a maximum of $24,000 for homes valued at $1.85 million and above.</cite>

On construction costs: <cite index="17-1">the federal and provincial governments will jointly spend $8.8 billion to lower municipal development charges over the next decade.</cite> But it isn't automatic everywhere: <cite index="24-9">participation is voluntary, municipalities will have to cut their DC rates by 30 to 50% for three years, and program funding is paid out over 10 years.</cite> If you're pricing a project, confirm what a given municipality has actually adopted rather than assuming a blanket cut.

What LIQWD's tracked inventory shows

Listing activity on our own platform has been brisk over the past month. LIQWD's tracked inventory as of August 3, 2026 shows:

• Toronto: 121 active listed projects (93 newly listed in the last 30 days), starting prices from $1,901
• Old Toronto: 47 projects (34 new), from $350,990
• Mississauga: 54 projects (10 new), from $390,900
• Brampton: 55 projects (39 new), from $419,990
• Oakville: 37 projects (29 new), from $389,900
• Markham: 41 projects (27 new), from $661,990
• Richmond Hill: 40 projects (32 new), from $399,990
• Miami (for cross-border investors): 55 projects (24 new), from $300,000

These are our platform's tracked listings, not the total market.

The takeaway for this week

With rates held, tax and DC measures live but municipality-specific, and CMHC pointing to a thin new-condo pipeline, buyers have room to compare deposit structures, incentives and occupancy timelines carefully rather than rushing.

Sources

• https://tradingeconomics.com/canada/interest-rate
• https://www.bnnbloomberg.ca/business/economics/2026/07/15/text-of-the-bank-of-canadas-latest-interest-rate-decision/
• https://stlawyers.ca/blog-news/bank-of-canada-interest-rate-july-2026/
• https://www.newswire.ca/news-releases/housing-starts-and-construction-data-for-june-2026-882510300.html
• https://www.cmhc-schl.gc.ca/media-newsroom/news-releases/2026/housing-starts-june-2026
• https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/housing-market/housing-market-outlook
• https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/housing-data/data-tables/housing-market-data/monthly-housing-starts-construction-data-tables
• https://www.cbc.ca/news/canada/toronto/carney-ford-chow-news-conference-9.7146922
• https://www.ctvnews.ca/toronto/politics/queens-park/article/development-charges-to-be-cut-in-half-for-three-years-through-88-billion-investment-by-ontario-and-federal-governments/
• https://www.amo.on.ca/policy/finance-infrastructure-and-economy/canada-ontario-development-charge-reduction-program
• https://www.pm.gc.ca/en/news/news-releases/2026/03/30/prime-minister-carney-secures-new-partnership-ontario-cut-taxes