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.
Falling housing starts but a population that’s shrinking much faster, but a government bailout to prevent prices from falling. What a time to be alive!
The question is not whats happening, but why our govts think its OK to subsidize banks, developers and other real estate participants, while the average Canadian is now living pay to pay? Maybe something more than a drop in the excise gas and an extra GST payment. With those Billions they could have lifted some people that the Liberals put into poverty out of it, but chose to give a subsidy to the people who least need it?
That Toronto chart really puts the “growth” in perspective. Even if the gov’s plan to buy 2k units happened every year we would still be miles away from the actual number of units needed.
How do you figure? There are apparnetly thousands of empty condos no one wants or can afford to buy in the GTA. So either there is a supply issue or there isnt? The issue seems to be a ‘price’ issue not a supply issue.
As noted in the story, the actions of the govt in this market are not to make housing more ‘affordable’ as they claim, but to maintain prices no one can afford. Even OFSI and the BoC knows there is a serious valuation issue in Canada, which is exactly what caused the GFC in 2009. It doesnt matter how many condos or apartments the govt subsidizes to be built, supply wont fix the problem which is price.
The bigger issue is why so many people keep making up nonsense about the prices being this high because of supply, and not greed, fraud and so on. Any basic understanding of market economics will tell you that price is only a factor in housing when literally they cant payt what you are asking. This is how the prices in Toronto and Vancouver hit 90-120% of a mean pre tax income just for the mortgage. This is called inelastic demand….
To A. Matsig , you couldn’t be more right , but very little acknowledgement for being that yet , the value of these unsold condos is the builders over-inflated estimated market value , if they sell 2 at that price then everything is skewed to that , their inventory will soon be worthless , hence the government bailout , did we leave out the part of political contributions ? The correction will happen. one more winter like we just had and the carrying costs of maintaining empty units will lead to defaults on financing. Invest in raincoats and goggles because when it hits the fan it will be a s**t show.