Builders saw another soft month even as year‑over‑year numbers looked stronger on paper
Canada’s homebuilding pipeline lost further steam in March 2026, reinforcing warnings that the recent rebound in construction begins to fade.
According to Canada Mortgage and Housing Corporation (CMHC), the seasonally adjusted annual rate (SAAR) of housing starts fell 6% to 235,852 units compared with 250,961 in February.
The six‑month trend, a smoother gauge closely watched by lenders and developers, declined 2.9% to 248,378 units.
Actual starts in centres with populations of 10,000 or more, by contrast, were up 10% year over year to 16,398 units, bringing the year‑to‑date tally to 49,206. That's a 9% gain over the same period in 2025.
“March housing starts data point to a continued loss of momentum in housing construction, broadly in line with CMHC's housing market outlook. While actual starts increased compared to a year ago, this largely reflects the exceptionally low level of construction activity in the first quarter of last year,” said Mathieu Laberge, CMHC's chief economist and senior vice president, housing insights.
“Monthly housing starts can be volatile and difficult to reconcile with conditions experienced by builders and developers on the ground. This is why we are providing new analysis this month on the relationship between building permits and housing starts, as well as the release of new data on non market housing starts.”
Regional picture and non‑market supply
Rural starts were estimated at a SAAR of 11,846 units, while Canada’s three largest metropolitan areas all posted double‑digit annual gains in actual starts.
Montreal recorded a 26% increase, Vancouver 21%, and Toronto 23%, each driven primarily by multi‑unit projects.
CMHC also introduced quarterly reporting on non‑market housing starts, broken out by intended market and dwelling type across 18 major census metropolitan areas.
The new series, encompassing projects delivered by public, non‑profit, co‑operative and community providers, aims to give policymakers and lenders better visibility on a segment that has become central to affordability strategies but is often poorly tracked.
Signals from permits, forecasts from sales
The March setback followed a modest rise in February, when CMHC reported a small month‑over‑month increase in SAAR starts that still left the trend essentially flat.
In its recent Housing Market Outlook, the agency projected that, after strong growth in 2025, rental starts should remain elevated this year before easing over the medium term as higher costs and tighter financing weighed on new projects.
Laberge’s latest “Canada’s Construction Pulse: Permits Lead, Starts Confirm” analysis underscored the message that building permits lead the cycle while starts confirm whether planned supply actually broke ground.
For lenders and brokers, that gap between permitted and started projects has become a key risk indicator as more developers delay launches or re‑phased sites.
Broader market signals pointed to the same cooling trend. The Canadian Real Estate Association (CREA) this week cut its forecast for 2026 home sales, now expecting a 1% annual increase instead of the 5.1% growth it projected in January, citing a weaker‑than‑expected start to the year and higher bond yields.
A longer slowdown in the making
For mortgage professionals, the March figures fit into a longer narrative. Housing starts in 2025 rose 5.6% from 2024 to 259,028 units, the fifth‑highest annual total on record, yet CMHC warned that “housing starts are beginning this year from a weaker position and market intelligence suggests slowing momentum for residential construction.”
That trend appeared to be playing out, with CMHC’s own forecasts now calling for national starts to decline from 2026 through 2028 as high construction costs, financing constraints and softer demand pushed more projects to the sidelines.
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