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Falling interest in detached homes contributes to downturn in nearby regions.
Mar 19, 2026 • Last updated 14 hours ago •
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Jeff Apthorp, owner of Forest City Framing, nails a spacer in a home under construction in a Strathroy-Caradoc subdivision in this file photo. Photo by Mike Hensen /The
The drop in demand for new houses that has impacted construction in London is now being keenly felt in surrounding municipalities, where the number of housing starts has decreased significantly over the past few years, new data indicates.
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Once making up around 30 percent of all new housing starts within the London metropolitan area back in 2021, the percentage of homes constructed outside city limits – including areas like Strathroy, Mt. Brydges, Lucan and Komoka – has continuously fallen to 26 percent in 2024, then to 18 percent last year and down to just 13 percent during the first two months of 2026, according to statistics from the Canada Mortgage and Housing Corp. (CMHC).
“The situation for those markets shows that most new homes being built there were detached, single-family residences,” stated Anthony Passarelli, CMHC’s lead economist for southern Ontario. “And on that front of the market, demand has been quite weak for a long while now; this explains much of the sluggish activity.”
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The need for new homes – particularly detached houses – has dropped dramatically over recent years due to rising interest rates and more recently declining consumer confidence caused largely by economic uncertainty amid an ongoing trade conflict with the United States. This situation is causing many buyers to hold off on making purchases.
This combined with a large inventory of unsold homes has led to a significant shift towards rental construction. Government incentives designed to tackle a shortage of rental units have also contributed positively to supply.
Similar pressures are impacting London as well; however, the city is experiencing a relatively stronger start to this year mainly because of new rental units being developed.
Out of the 380 new housing starts recorded in London thus far this year, 339 or about 89 percent are apartments or rental units according to CMHC data.
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“The numbers for purpose-built rental construction in London are helping maintain overall construction figures at levels consistent with historical trends; however it’s all funneled into one category,” said Passarelli.
Mayor Colin Grantham from Strathroy-Caradoc referred to this recent trend as “worrisome,” pointing out that municipal council approved several large developments both in Strathroy and Mt. Brydges which have yet to get underway.
“Developers and builders aren’t going to proceed if market conditions aren’t favorable; that’s exactly what’s happening here,” he mentioned. “That’s simply market dynamics.”
Grantham also noted that one major factor behind previous growth was the work-from-home trend triggered by COVID-19 which enabled individuals from other parts of Ontario seeking homes further away from their jobs.
Now that many businesses require staff members back on-site , “that’s likely going to impact communities like ours,” Grantham added , mentioning that one positive aspect of this slowdown is giving municipalities some time to prepare for future development.
“We’re experiencing a downturn , but we’re still set on growing,” he said. “Maybe it won’t be as fast , but right now we’re focused on getting ahead and ensuring we have enough capacity because projections show remarkable growth potential over the next twenty-five or thirty years.”
Passarelli agreed with this perspective saying when conditions improve again demand for homeownership will likely increase leading construction activity too.
“Although current building activity outside London and St. Thomas hasn’t been strong lately , once demand returns and we observe some tightening within these markets.. it could trigger an increase in construction there,” he remarked.
“Particularly since sometimes you can get more value if you’re looking at single-family homes outside London.”
jjuha@postmedia. com
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London area housing starts mark one of decade’s worst years in 2025
Why London home sales are slowing and when a rebound could come< Share this article through your social networkSource link
