Canada’s building boom is slowing, but not in the country’s biggest markets—with a big exception. Canada Mortgage and Housing Corporation (CMHC) data shows new housing starts fell in March. Despite the drop, two of the three largest markets saw an uptick in building activity. The exception was Canada’s most expensive market, where completed and unsold inventory is near record highs.
Canadian Housing Starts Fall 6%, Reflecting New Home Permits
The CMHC “trend measure” shows new housing starts fell 2.9% to 248,378 homes in March. However, the measure is a 6-month average of the seasonally adjusted annual rate (SAAR). That’s not just a mouthful, it’s multiple layers of modelling on top of the actual numbers. Despite being the data the agency led with, it’s a noisy measure that doesn’t quite reflect reality so much as it shows someone had a fun day with a calculator.
The traditionally used SAAR shows 235,852 new housing starts for March, 6% lower than February. This matches the builder permit data discussed last week, revealing fewer units planned.
New Home Starts Pick Up In Toronto & Montreal, Fall In Vancouver
Canadian new housing starts: Seasonally adjusted annual rate for selected CMAs.
Source: CMHC; Better Dwelling.
Urban construction once again dominates new home building across Canada. The SAAR of urban units reached 224,006 new starts in March, though it was 6% lower than February. It’s lower, but roughly the same activity in 2024 and much higher than pre-pandemic building volumes. The piles of taxpayer subsidies to “accelerate” building are mostly just propping up activity.
Canada saw 2 of its Big 3 real estate markets report higher building activity last month. Montreal reported 28,656 new housing starts (SAAR) for March, up a staggering 128% from February. Toronto saw a smaller—but still impressive—33% growth to 18,283 starts over the same period. Vancouver was the outlier in the month’s report, with starts falling 23% from February to 21,087 SAAR. It’s worth noting that despite Toronto CMA’s population being much larger, it has the fewest starts of the three.
With few exceptions, new building activity slowed last month—but it wasn’t a surprise. New housing starts reflect demand from 2-3 years prior, putting it at the tail end of the real estate boom. The weak building activity in Toronto and Vancouver reflects waning pre-construction demand. With near-record levels of completed and unsold units in those cities, it would be surprising to see a sudden building boom.
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