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Economic News

Canada: Housing Starts Stabilize as Developers Await Better Conditions

September 16, 2026
Nom du rédacteur
Kari Norman
Senior Economist

Highlights

  • The pace of housing starts in Canada was flat in August at 229.0k (saar), while the 6-month moving average declined to 244.1k. Table 1 summarizes key homebuilding indicators.
  • Based on today’s data releases, our Q3 real GDP growth tracking is around 1.0% annualized.

Comments

The pace of seasonally adjusted housing starts was little changed in August, at 229.0k units. A decline in multi-unit starts, which fell from 179k in July to 174k in August, was offset by a rise in single family construction from 39k to 44k units (graph 1). While housing starts count all units equally, the shift toward more single-family dwellings—which reached their highest level in more than a year—could ultimately accommodate more people than an equivalent increase in apartment construction.

The Canada Mortgage and Housing Corporation (CMHC) has been emphasizing the 6-month trend measure, which declined 1.3% in August to 244.1k units. It remains about 200k units short of the CMHC External link.’s annual target needed to restore pre-pandemic levels of affordability by 2036. Regionally, the 6-month trend in housing starts increased 6% in both Montreal and Vancouver, while Toronto was essentially unchanged.

Implications

Near-term policy measures—including CMHC financing programs for purpose-built rentals and the GST/HST rebate—should continue to support homebuilding activity. However, underlying conditions remain uncertain. Recent population declines, driven largely by reductions of temporary foreign workers and international students, point to softer rental demand. Higher longer-term bond yields are increasing borrowing costs for both homebuyers and developers, while weak condo presales in major markets also suggests that multi-unit construction could slow once the current project pipeline is completed.

That said, developers may be in a position to respond quickly if market conditions improve. Despite a softer reading for multi-unit building permits in July, the gap between permits and housing starts has remained unusually wide since early 2025 relative to historical norms (graph 2). This suggests that a sizeable inventory of approved projects has yet to break ground.

With oil prices and escalating trade tensions with the US External link. posing upside risks to inflation External link., while weaker economic growth presents downside risks to growth, we expect the Bank of Canada External link. to remain on the sidelines through the end of 2026.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.