The Canada Mortgage and Housing Corporation (CMHC) has released its February 2025 housing starts data, providing insight into the state of residential construction across the country. Housing starts are a key economic indicator that tracks the number of residential projects, categorized into single-family homes, townhouses or small condominiums, and apartment buildings with five or more units.
National Overview
In February, the six-month moving average of the seasonally adjusted annual rate (SAAR) of housing starts increased by 1.1%, reaching 239,382 units. However, on a year-over-year basis, actual housing starts in urban centres with populations of 10,000 or greater fell by 17%, with 14,459 units initiated compared to 17,454 units in February 2024.
The standalone SAAR for all housing starts across Canada declined by 4% month-over-month, totalling 229,030 units in February compared to 239,322 units in January. Urban housing starts also saw a 5% decline, reaching 209,784 units. In rural areas, housing starts were estimated at a seasonally adjusted annual rate of 19,246 units.
Source: CMHC
Source: CMHC
Regional Highlights
Regional disparities were evident in February’s data, with some major cities experiencing substantial declines while others saw modest growth.
Montréal
In contrast to the national trend, Montréal recorded a 6% year-over-year increase in actual housing starts. Both multi-unit projects and single-detached homes saw gains, reflecting resilience in the city’s housing sector.
Vancouver
Housing starts in Vancouver plummeted by 48% compared to February 2024. A significant decrease in both multi-unit and single-detached construction projects contributed to the sharp decline.
Toronto
Similarly, Toronto saw a 68% drop in housing starts, primarily driven by a slowdown in multi-unit developments. The decline signals ongoing challenges in the region’s construction activity.
Ottawa
Single-detached starts increased from 27 to 125, with an overall rise of 122% in all housing starts.
Factors Influencing the Trends
Multiple factors are contributing to the slowdown in Canadian housing starts. For example, CME Group data shows that although housing starts had been trending upward since August 2024, severe winter weather in recent months led to declines in two of the past three months, directly affecting construction activity. In addition, trade uncertainties are raising concerns about increased construction costs, a factor that can dampen builder confidence. Finally, the Bank of Canada’s moves highlight that financing costs and higher interest rates remain pivotal in influencing new project initiation. These elements combined offer a data-based explanation for the observed regional and temporal variations in housing starts.
The CMHC forecasts that housing starts will slow down over the next couple of years, but remain above their 10-year average.
