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Economic News

Canada: Housing Starts Decelerated Slightly in March

April 16, 2024
Kari Norman


  • The pace of housing starts in Canada slowed in March to 242k (saar), with decelerations seen in both single and multi-unit housing projects. The table below summarizes key data points.
  • Our tracking still suggests real annualized GDP growth in the range of 2.5% to 3% annualized in the first quarter of 2024. That’s in line with the Bank of Canada’s latest forecast of 2.8% published last week External link..


Despite pulling back in March, multi-unit construction has seen a year-to-date increase of 15.5% as compared to the same months last year. Given the recent federal announcement External link. of a $15B top-up in the Apartment Construction Loan Program, we should continue to see strength in multi-unit residential construction for the foreseeable future, though tempered by the lagged effect of high interest rates and ongoing shortages in labour. The slight decline in multi-unit housing starts in March likely just reflects the volatile nature from one month to the next of these large projects (graph 1).

Single-unit residential construction, on the other hand, has experienced a year-to-date decline of 6.6% as compared to the same months last year.

The regional variations across provinces underscore the diverse dynamics at play within Canada’s housing market. The pace of construction continued to advance in BC, while Quebec remained steady. Ontario and Alberta starts pulled back in March as compared to the prior month.

The Government of Canada announced several new measures External link. last week with the hopes of improving housing affordability. First-time homebuyers of newly-built homes will be permitted to have 30-year amortizations on insured mortgages, effectively reducing their monthly payments. Additional affordability measures include increasing the amounts first-time homebuyers can withdraw from RRSPs under the Homebuyers’ Plan as well as extending the grace period to five years before they need to start repayments. Other measures recently announced External link. meant to accelerate home construction include $6B for a Canada Housing Infrastructure Fund to accelerate construction of water, wastewater, stormwater and solid waste infrastructure to support new home construction.

Looking forward, the gradual unwinding of interest rate hikes expected to begin this June will bring cautious optimism to housing starts. However, this optimism is tempered by challenges such as construction labour shortages, inflation in building materials costs and weaker homebuilder sentiment. These factors could potentially slow the momentum seen in early 2024, despite a favourable shift in monetary policy.

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.