London building permits dip, but optimism rises amidst new incentives

New numbers from the city show over a decline in the number of the building permits issued compared to 2025. CTV London’s Gerry Dewan reports.

Despite a notable decrease in building permits issued during the first quarter of 2026 compared to the previous year, optimism is on the rise within London’s housing development sector, fueled by newly announced government programs designed to stimulate construction and homeownership.

Data from the City of London’s Building Services Report for Quarter 1 2026 reveals that while overall activity remains steady, the number of building permits issued between Jan. 1 and March 31, 2026, saw a decline of 5.42 per cent when measured against the same period in 2025.

Construction values also experienced a significant drop of 54.83 per cent, and the number of new dwelling units constructed fell by 60.3 per cent year-over-year.

Jared Zaifman, CEO of the London Home Builders’ Association (LHBA), provided context for these figures.

“Last year was actually a pretty decent year, all things considered,” Zaifman stated. “We certainly expected this year would be a little bit slower to start.”

He added that the official statistics were collected before several key new programs were announced, which he believes will significantly bolster housing starts.

A major driver of this renewed optimism is the federal HST rebate on new homes.

“Certainly the HST rebate is a big one,” Zaifman told CTV News. “You know, now people can get up to $130,000 off of every new home, every new home purchase. That’s great for inventory homes, but also for builders now signing new contracts with potential purchasers going forward.”

Beyond the federal initiative, Zaifman highlighted other provincial and municipal programs poised to support the industry.

“There is also the development charge incentive program that the province and feds are rolling out,” he noted, expressing anticipation for further details. “City Council just approved the permit fee waiver program. So that’s great, especially for apartments. If you’re going to do a 100-to-200-unit apartment building, that could be a couple hundred thousand dollars.”

Economic uncertainty, largely attributed to ongoing trade disputes, continues to influence prospective buyers, according to Zaifman.

An Abacus poll commissioned by the Canadian Home Builders’ Association found that 78 per cent of individuals interested in homeownership are hesitant due to factors such as fees, taxes, and broader economic concerns.

Zaifman believes these new incentive programs are specifically designed to address these barriers, potentially unlocking a significant segment of the market, “Some of these factors can really make a huge difference. And changing that and making the dream of homeownership still a reality for many people in this country.”

The report indicates that despite the year-over-year decrease in permit numbers, activity levels reflect changes in project timing and housing composition rather than a reduction in development interest.

Notably, townhouse construction saw a significant increase year-to-date, underscoring sustained demand for medium-density housing. The current activity levels, while below unusually strong recent years, are described as sitting comfortably within the longer-term historical range.

The City report on building activity will go to the Planning and Environment Committee on Tuesday (May 5). It also detailed that as of March 31, 2026, a total of 716 permits were issued, representing 445 new dwelling units and a construction value of $213.4 million.

While this shows a decrease from Q1 2025, the number of applications in process remains substantial, with 743 applications representing approximately $949 million in construction value and an additional 2,071 dwelling units. The average rate of application submission up to March 31, 2026, stood at 10.6 applications per business day.

Reflecting broader demographic shifts, Zaifman also pointed out that the average age of a new home buyer has increased from 30 years old a decade ago to 40 years old today.

He expressed confidence that the combined impact of these new incentives and the underlying demand will help address housing needs and make homeownership accessible.