Housing starts continue to slide, reports CMHC

Canada’s residential construction sector opened the year on a softer footing, with new data from Canada Mortgage and Housing Corp. (CMHC) pointing to a continued slowdown in homebuilding activity and little indication of a rebound anytime soon.

The national housing agency reported Monday that the seasonally adjusted annual rate (SAAR) of housing starts fell 15 per cent in January to 238,049 units, down from 280,668 units in December, more than erasing the gains recorded at the end of 2025.

While monthly figures can fluctuate sharply, the broader trend is also moving lower. CMHC’s six-month moving average of the annual pace of housing starts declined 3.5 per cent to 254,794 units in January, marking the fourth consecutive monthly decrease.

According to CMHC, several structural and cyclical pressures are weighing on new construction. Trade and geopolitical uncertainty, elevated construction costs, softer buyer demand and rising inventories are all constraining developer activity.  

CMHC deputy chief economist Tania Bourassa-Ochoa said that a near-term turnaround appears unlikely, echoing feedback CMHC has been receiving from builders in recent months.

The slowdown comes amid shifting macroeconomic conditions, including lower immigration targets and ongoing uncertainty surrounding U.S. trade policy, both factors that can influence housing demand and investor confidence.

Bigger cities hold steady

On a year-over-year basis, the picture is more stable in larger centres. 

In municipalities with populations of 10,000 or greater, actual housing starts totalled 16,088 units in January, up one per cent from 15,957 units recorded in the same month last year.

Among Canada’s big three cities, Vancouver recorded a 37 per cent increase in actual starts due to higher multi-unit and single-detached starts.

Toronto declined two per cent due to lower single-detached starts. 

Montreal posted a 44 per cent year-over-year decrease this month, driven by lower multi-unit and single-detached starts.