Canadian Real Estate Industry Faces Worst Downturn in Decades, Threatening 100,000 Jobs and Future Supply of New Homes

Strategic Insights -

The Canadian real estate industry is in the midst of its worst downturn since the 1990s recession, with over 100,000 jobs at risk due to declining preconstruction sales. Developers such as Mattamy Homes, Great Gulf, and Wesgroup Properties have cut staff, while marketing and advertising companies like LA Inc. have shut down altogether. Norm Li, owner of Norm Li Rendering, had to lay off 75% of his staff as the industry faces a significant slowdown. According to Altus Group, preconstruction condo sales in Toronto are lower than in 1995, and annualized sales in other Ontario regions such as Kitchener-Waterloo and Hamilton are 80% lower than the 2020-2024 average.

Key Takeaways:

  • Over 100,000 jobs in the homebuilding industry are at risk due to the downturn, with developers such as Mattamy Homes, Great Gulf, and Wesgroup Properties cutting staff.
  • Norm Li, owner of Norm Li Rendering, laid off 75% of his staff as the industry faces a significant slowdown.
  • Preconstruction condo sales in Toronto are lower than in 1995, with annualized sales in other Ontario regions such as Kitchener-Waterloo and Hamilton 80% lower than the 2020-2024 average.
  • Developers such as Mattamy, Great Gulf, and Wesgroup have had to cut jobs due to the poor economic returns and lack of buyers.
  • Marketing and advertising companies such as LA Inc. have shut down altogether due to the decline in business.
  • Research from Altus shows that 536,300 jobs are in the new construction sector in Canada, with 236,300 direct jobs and the rest providing goods and services to developers.
  • Peter Norman, Altus economic strategist, estimates that 105,000 to 170,000 of those jobs are at risk of disappearing.

Statistics:

  • 536,300 jobs are in the new construction sector in Canada (Altus Group).
  • 236,300 direct jobs in the new construction sector (Altus Group).
  • 105,000 to 170,000 jobs at risk of disappearing (Peter Norman, Altus).
  • 75% of staff laid off at Norm Li Rendering (Norm Li).
  • 6% workforce cut at Mattamy Homes (Brent Carey, Mattamy Homes).
  • 12% workforce cut at Wesgroup (Beau Jarvis, Wesgroup).
  • 5% workforce cut at Polygon Realty (Neil Chrystal, Polygon Realty).
  • 25% workforce cut at Rennie (Greg Zayadi, Rennie).
  • 35% workforce cut at MLA Realty (Cameron McNeill, MLA Realty).

Sources:

  • Globe and Mail article: "Decline threatens significant part of Canadian economy and hampers future supply of new homes"
  • Altus Group research
  • Interview with Norm Li
  • Statement from Mattamy Homes (Brent Carey)
  • Statement from Wesgroup (Beau Jarvis)
  • Statement from Polygon Realty (Neil Chrystal)
  • Statement from Rennie (Greg Zayadi)
  • Statement from MLA Realty (Cameron McNeill)