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orm Li, founder of a company that creates visual content for real estate developers, has had to lay off 75% of his staff due to the Canadian residential development industry's worst downturn since the 1990s recession. Li watched as more developers put projects on hold or cancelled them, and eventually, his company's work dried up. "I tried to hold on for a long time, but then one day I saw it," he said. "If I didn't lay off these people today, the bank would shut me down tomorrow."

    The industry-wide slowdown has led to job cuts across the sector, with companies like Mattamy Homes, Great Gulf, and Polygon Realty Ltd. cutting staff. Preconstruction sales brokerages such as Hirsch & Associates and Rennie & Associates Realty Ltd. have also laid off employees. Marketing and advertising company LA Inc. shut down, while SvN Architects + Planners made some cuts.

    The downturn threatens over 100,000 jobs in the homebuilding industry, a significant part of the Canadian economy. In Toronto, preconstruction condo sales were lower than in 1995, according to Urbanation Inc. Other Ontario regions such as Kitchener-Waterloo and Hamilton saw annualized preconstruction condo sales drop by 80% compared to the 2020-2024 average.

    Higher construction expenses, municipal development charges, and borrowing costs have driven up costs for builders. Housing demand has been curbed by the federal government's decision to cap foreign students and newcomers. Investors are no longer interested in new condos due to low profit margins. Condo values are not increasing, and investors are burning through cash.

    Mattamy Homes cut 6% of its workforce, citing global economic uncertainty and affordability challenges. Wesgroup Properties delayed projects and cut 12% of its staff. Polygon Realty started by not replacing employees who left but eventually had to cut 5% of its workforce. Great Gulf also laid off staff, according to sources.

    The industry is bracing for more job losses, with Altus Group estimating that 105,000 to 170,000 jobs are at risk of disappearing. Research from Altus shows that even more jobs could vanish as the industry shrinks. The construction work force is already facing a problem with scores of experienced workers nearing retirement age.

    Norm Li described the layoffs as "Sophie's choice," referring to the movie where a mother has to choose which child would survive. He spent over a decade building his team, which was internationally renowned. "That is the saddest part," he said.