Canada’s housing construction activity continued to slow in March, with actual housing starts declining 12.5% year-over-year in cities with populations over 10,000, according to a new Canada Mortgage and Housing Corporation (CMHC) report.

A total of 14,924 were recorded last month, down from 17,052 in March 2024.

The drop was largely driven by a sharp pullback in major urban centres, particularly Toronto and Vancouver, where declines in both multi-unit and single-detached housing starts weighed heavily on national figures. In Toronto, housing starts plummeted 65% compared to a year earlier, while Vancouver saw a 59% decline—both led by fewer multi-unit projects.

Despite the national downturn, Montreal bucked the trend with a notable 138% year-over-year increase in actual housing starts, fuelled by strong growth in multi-unit developments.

The seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada fell 3.3% in March to 214,155 units, down from 221,405 units in February. In centres with populations over 10,000, the SAAR dipped 2.8% to 203,285 units from 209,093 the previous month.

Meanwhile, the six-month trend measure, which smooths monthly fluctuations to provide a clearer picture of long-term activity, declined 0.7% to 235,316 units in March.

“March’s decline in housing starts surprised consensus expectations to the downside,” said TD Economist Rishi Sondhi in a research note provided to Connect. “However, it was consistent with our view that homebuilding will moderate amid past declines in demand and a sharp slowdown in population growth.”

The view is centered on a pullback in housing starts in Ontario as the province’s condo construction sinks due to a large oversupply, he added.

“March’s data was a glaring example, given the steep drop in starts in Canada’s largest province last month,” wrote Sondhi. “More broadly, Canadian homebuilding is likely to remain subdued moving forward amid economic uncertainty, weak population growth and elevated construction costs.

Actual housing starts in Canada’s large urban centres dropped 17% year-over-year in February, also due to a decline in multi-unit starts.

Photo: Re/Max

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