The Canadian housing market is sending mixed signals in 2025. On one hand, national home sales have ticked upward for several consecutive months. On the other, housing starts have dropped sharply, with Canada Mortgage and Housing Corporation (CMHC) reporting a 16% monthly decline in August 2025. For traditional homebuyers, this slowdown in new builds is discouraging — but for real estate investors and flippers working with wholesalers, it may be a hidden opportunity.
In this article, we’ll explore what falling housing starts really mean, why it matters to investors, and how off-market real estate can help fill the gap when new supply isn’t coming online.
What Are Housing Starts?
Housing starts are a key measure of how many new residential units (single-family homes, townhouses, condos, and apartments) are beginning construction in a given month. When housing starts fall, it signals that builders are pulling back — often because of financing challenges, higher construction costs, or weaker buyer demand.
In August 2025, housing starts tumbled more than analysts expected, marking one of the steepest short-term drops in recent years. This isn’t just a blip — it’s part of a trend where many builders have struggled to make projects viable amid elevated borrowing costs and rising material expenses.
Why Falling Housing Starts Matter for Investors
At first glance, fewer housing starts sound like bad news — less supply means fewer new homes on the market. But if you’re an investor or flipper, it can actually create opportunity:
- Resale Homes Become More Valuable
When fewer brand-new homes are hitting the market, demand shifts back toward existing homes. Buyers who might have considered a pre-construction property now look for resale homes — and many prefer recently renovated ones. - Builders Pull Back, Wholesalers Step In
With traditional developers slowing down, wholesalers play a more critical role in supplying investors with discounted properties. Flippers can acquire, renovate, and resell homes faster than waiting years for new construction projects to complete. - Market Gaps Open Up in Key Regions
In high-demand areas like the GTA and surrounding Ontario cities, fewer housing starts widen the gap between demand and supply. Investors who buy off-market properties now can capitalize on these shortages once demand swings back.
The Off-Market Advantage in a Weak Construction Cycle
Off-market real estate — properties not listed publicly on MLS — is especially valuable in this type of environment. Here’s why:
- Discounted Pricing: Distressed sellers and motivated homeowners offer properties below market value.
- Speed of Acquisition: Wholesalers like SLG Property Deals connect investors directly with sellers, bypassing long negotiations and bidding wars.
- High Flip Potential: With limited new supply, updated resale homes stand out more to buyers, often commanding strong resale prices relative to their condition.
- Less Competition: While builders pause, investors can move quickly into the space by buying off-market and getting properties ready for end-users.
Why Builders Are Stepping Back (and What It Means for You)
The construction slowdown is rooted in some very real challenges:
- High Interest Rates: Developers finance projects with debt, and higher borrowing costs make new builds risky.
- Rising Construction Costs: Labour and material costs remain elevated, squeezing margins.
- Weaker Buyer Demand: Many buyers have been sidelined by affordability issues, lowering pre-construction sales.
For investors, though, this environment means the resale market becomes a bigger share of available housing stock. Buyers frustrated with limited or expensive new-build options will turn to renovated homes — exactly the type of property flippers can supply.
How SLG Property Deals Helps Investors Take Advantage
At SLG Property Deals, we specialize in sourcing off-market, wholesale homes across Ontario that investors can acquire at a discount. By working with us, you can:
- Secure properties below market value — often at prices where MLS deals simply don’t work.
- Access exclusive inventory that never hits the open market.
- Flip faster and position your property as a renovated alternative to costly new builds.
When builders step back, wholesalers step forward. The construction slowdown isn’t a setback — it’s an opening for investors who understand where to look.