The Developer’s Dilemma — Why Markham’s Housing Targets Are at Risk and What It Means for Supply

Markham made a bold pledge: facilitate the construction of 44,000 new homes to meet the provincial housing target assigned to the city under Ontario’s Housing Supply Action Plan. The problem is that the conditions required to actually deliver those 44,000 homes are not currently in place — and the gap between the pledge and the delivery has direct implications for every buyer, seller, and investor in Markham’s market.

Michael John Lau, a top real estate agent in Markham Ontario, is laying out the honest picture.

The Target vs. Reality Gap

Markham’s population will miss its 2026 target with a shortfall of about 36,000 people based on current growth trends, though future intensification could eventually close the gap, with Markham potentially reaching its 421,600 target by 2031.

Population and construction shortfalls are related but distinct. The province needs 175,000 new housing starts per year across Ontario from 2026 onward to reach the 1.5 million homes target by 2031. The government projects only 94,400 housing starts in 2026 based on private sector forecasts — well below target. The Ford government was already more than 100,000 housing starts short of its 2025 goal. Markham’s 44,000-unit pledge faces the same structural headwinds hitting every GTA municipality.

Why Developers Are Not Building

CMHC’s Spring 2026 Housing Supply Report found that condominium presales collapsed, unsold inventory surged, and financial conditions tightened. Slower population growth, cautious buyers, and elevated construction costs pushed developers toward smaller apartments while limiting family-sized, ground-oriented homes.

The developer’s dilemma is mathematical. A new Markham condo building cannot be economically launched if the achievable pre-sale price does not cover land, hard construction, development charges, financing, and a reasonable developer margin. In 2021 and 2022, those numbers worked. In 2025 and 2026 they frequently do not — construction costs have risen 30% to 40% since 2019, development charges rose 30% between 2020 and 2024, financing costs are higher, and achievable pre-sale prices have fallen from the 2022 peak. The result: starts fell again in 2025, driven by weaker apartment activity.

What Bill 98 and the HST Rebate Do to Close the Gap

Ontario’s Bill 98 — which reduces development charges and standardizes planning approvals — and the HST rebate of up to $130,000 for new home purchases signed before March 31, 2027, directly address both sides of the developer’s viability equation.

• On the cost side: lower development charges reduce the cost of launching a project by $20,000 to $60,000 per unit — making previously unviable projects feasible.
• On the revenue side: the HST rebate effectively reduces the buyer’s net purchase price by up to $130,000, expanding the pool of qualified buyers without requiring the developer to cut their asking price. More qualified buyers means better pre-sale absorption — the condition lenders require before providing construction financing.

The combination is the most significant government intervention in the developer’s viability equation in decades, specifically designed to unlock stalled housing starts.

The Supply Cliff — Why Under-Delivery Now Creates Opportunity Later

This supply cliff is the most important medium-term value driver for Markham’s existing housing stock. Homeowners who purchase established Markham properties in 2026 are buying ahead of a period when competing new supply will be significantly reduced relative to demand. The buyers who benefit most are those who enter during the current supply-heavy, buyer-friendly window — and hold through the supply cliff of 2028 to 2030 when the demand-supply balance tips back in sellers’ favour.

This is not speculative optimism. It is arithmetic. The population that continues to grow — Markham’s forecast path to 421,600 by 2031 — will need housing that has not been built yet. The combination produces a predictable tightening of supply relative to demand in the 2028 to 2031 period that supports property values for buyers who position themselves correctly today.

Michael John Lau, a top real estate agent in Markham Ontario, helps buyers understand not just today’s market but the medium-term supply and demand trajectory their holding period will navigate — because a sound real estate decision requires both current market intelligence and long-term fundamental analysis.

Frequently Asked Questions

How many homes did Markham pledge to build?

Markham pledged to facilitate 44,000 new homes under Ontario's Housing Supply Action Plan. However, current conditions — collapsed presales, high construction costs, and tightened financing — make hitting that target unlikely on schedule.

Why aren't developers building in Markham?

The math doesn't work. Construction costs rose 30–40% since 2019, development charges rose ~30% from 2020–2024, financing costs are higher, and achievable pre-sale prices fell from the 2022 peak — so many projects can't cover their costs plus a reasonable margin.

What is the Markham housing supply cliff?

Construction starts fell 51% from 18,950 units in 2023 to 9,258 in 2024. Homes not started then can't complete in 2028–2029, so competing new supply will be sharply reduced in 2028–2030 while population keeps growing — tightening supply relative to demand.

How does the supply cliff create opportunity for buyers?

Buyers who purchase in the current supply-heavy, buyer-friendly 2026 window and hold through the 2028–2030 supply cliff position themselves for the period when reduced new supply meets continued population growth — historically supportive of property values.