Ontario Pre-Construction Market Note: What Buyers Need to Know (August 2026)

Ontario Pre-Construction Market Note — Week of August 2, 2026

Three things moved the pre-construction picture this week: the Bank of Canada held rates again, CMHC signalled weaker condo starts, and Ontario's development-charge cuts kept rolling out unevenly. Here's what each means for buyers — a source-based read with no forecasts and no promises.

Rates: a sixth consecutive hold

Financing costs held steady. <cite index="8-1,8-2">The Bank of Canada held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The next scheduled date for announcing the overnight rate target is September 2, 2026.</cite> This was a hold <cite index="7-4">for a sixth consecutive time.</cite>

The Bank's own framing stayed cautious. <cite index="8-4,8-5,8-6">Canada's economy has been weak but is showing signs of improvement. Growth is expected to pick up, and inflation is projected to ease to around 2%. Uncertainty remains elevated.</cite>

The practical takeaway: borrowing costs held rather than moved, and how that lands depends on your mortgage type. <cite index="6-10,6-13,6-14">With a variable-rate mortgage the rate change immediately impacts your payments, while with a fixed-rate mortgage your rate stays the same until the end of your term, even if the Bank of Canada rate changes.</cite> Because pre-construction deposit structures can span years before closing, confirm your financing timeline with a mortgage advisor rather than assuming today's rate is your closing rate.

Supply: CMHC data points to weaker condo starts

The most recent national data showed construction cooling. <cite index="10-11">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 Canada Mortgage and Housing Corporation (CMHC).</cite> <cite index="10-13">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> Toronto ran counter to the national headline: <cite index="10-7">Toronto starts increased 25% due to higher multi-unit starts.</cite>

Looking further out, CMHC is notably cautious on the condo segment that dominates pre-construction. <cite index="14-12,14-13,14-14">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. Developers are focusing on completing projects already underway rather than starting new ones.</cite>

One caveat for Ontario buyers specifically: <cite index="17-5,17-6,17-7">CMHC is conducting a methodology review of the unabsorbed inventory data series in the Ontario context. Updates will follow. In the meantime, use the data with caution.</cite> The next monthly release is scheduled: <cite index="10-11,11-10">CMHC will release the July housing starts data on August 18 at 8:15 AM.</cite>

Policy: development-charge reductions still rolling out

A key affordability lever remains the Canada-Ontario development-charge program. <cite index="18-7,18-8">The Ontario and federal governments announced detailed program parameters for the Canada-Ontario Development Charges Reduction Program. The $8.8 billion application-based program is available to the over 200 municipalities that levy development charges.</cite> These charges matter to end prices because <cite index="19-2">they range from tens of thousands of dollars in smaller municipalities to as much as $130,000 per single-family home in the GTA.</cite>

But the reductions are not automatic. <cite index="23-10,23-11">The DC reduction is not automatic and not yet in effect everywhere. It requires individual municipalities to commit to reductions and identify eligible infrastructure projects.</cite> So the advice for buyers is direct: <cite index="23-12">if you are purchasing a new home in 2026 or 2027, ask your builder and your municipality whether they are participating in the program and when reduced rates will apply.</cite>

What we're seeing on LIQWD

Our own platform data shows active new-project selection across the GTA as of August 2, 2026. These are LIQWD's tracked listings, not market-wide totals:

• Toronto: 121 active projects (114 newly listed in the last 30 days), from $1,901
• Brampton: 55 projects (39 newly listed), from $419,990
• Mississauga: 54 projects (10 newly listed), from $390,900
• Old Toronto: 47 projects (34 newly listed), from $350,990
• Markham: 41 projects (27 newly listed), from $661,990
• Richmond Hill: 40 projects (32 newly listed), from $399,990
• Oakville: 37 projects (30 newly listed), from $389,900
• Miami: 55 projects (30 newly listed), from $300,000

The high share of newly listed projects suggests active launch and re-listing activity on our platform, even as CMHC's national data points to a slower start environment. As always, verify pricing, deposit terms, and occupancy timelines directly with builders before committing.

Sources

• https://www.bankofcanada.ca/2026/07/fad-press-release-2026-07-15/
• https://www.nesto.ca/mortgage-basics/bank-of-canada-interest-rate-schedule/
• https://www.rbcroyalbank.com/en-ca/my-money-matters/money-academy/economics-101/understanding-interest-rates/bank-of-canada-interest-rate-announcement/
• 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.amo.on.ca/policy/finance-infrastructure-and-economy/canada-ontario-development-charge-reduction-program
• https://www.theglobeandmail.com/investing/markets/markets-news/GlobeNewswire/36566679/ontario-home-building-and-development-industry-hails-historic-federal-and-provincial-announcement-on-development-charges/
• https://www.homeowner.ca/a/ontario-housing-development-charges-explained-how-fees-show-up-in-new-home-prices