National starts fell last month, with Ontario and BC driving the decline
Canada’s housing construction sector took a sharper-than-expected downturn in October, with national housing starts dropping 17% from the previous month, according to new data from Canada Mortgage and Housing Corporation (CMHC).
The seasonally adjusted annualized rate (SAAR) fell to 232,765 units, well below economists’ forecasts of 265,000 and down from September’s revised 279,174 units.
The six-month trend, a more stable measure that smooths out monthly volatility, also slipped by 3% to 268,907 units.
“Both the six-month trend in housing starts and the SAAR were pushed lower in October by significantly lower monthly starts in Ontario and British Columbia,” said Tania Bourassa-Ochoa, CMHC’s deputy chief economist.
“However, higher starts in markets like Montréal, Calgary, and Edmonton continue to keep national year-to-date elevated compared to the same period last year. While these results are generally reflective of investment decisions made months or even years ago, they also highlight persistent and significant regional contrasts in housing construction trends across the country,” Bourassa-Ochoa said.
Regional disparities widen
Montréal bucked the national trend, posting a 104% year-over-year surge in actual housing starts, largely due to a spike in multi-unit projects.
In contrast, Vancouver saw a 36% decline, and Toronto’s starts plummeted 42%, with both cities experiencing steep drops in multi-unit and single-detached construction.
Outside the largest cities, actual housing starts in centres with populations over 10,000 fell 3% year-over-year, with 19,174 units recorded in October compared to 19,763 a year earlier.
The rural starts monthly SAAR estimate stood at 22,062 units.
“The last 12-18 months have seen many planned development projects in Ontario and British Columbia delayed or cancelled outright amid a glut of new unsold condominium units and a sharp drop in population growth stemming from shifts in federal immigration policy,” Jock Finlayson, senior fellow at the Fraser Institute, said.
Broader context and policy implications
While the October numbers point to a cooling market, the year-to-date total for 2025 remained 5% higher than the same period last year, a sign of lingering momentum from earlier in the cycle.
CMHC emphasized the importance of its trend measure, noting that “analyzing only SAAR data can be misleading, as the multi-unit segment largely drives the market and can vary significantly from one month to the next.”
The agency also highlighted the launch of new data sets as part of its Modernizing Housing Data initiative, aiming to provide greater transparency on completions and absorptions in markets of various sizes.
Canada’s stalled homebuilding casts long shadow over economic recovery
The slowdown in homebuilding is not just a sectoral issue. Construction accounts for nearly 8% of Canada’s economy, and if government-driven industries are excluded, it employs more than one in ten private-sector workers.
“Most of these jobs involve homebuilding, home renovation, and real estate sales and development,” Finlayson said.
According to Statistics Canada, the value of GDP directly attributable to housing reached $238 billion in 2024, up slightly from 2023 but still below 2021 and 2022 levels.
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