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Economic News

Canada: The Housing Starts Heatwave Continued in July

August 18, 2025
Kari Norman
Economist

Highlights

  • The pace of housing starts in Canada rose once again, reaching 294k (saar) in July. Table 1 summarizes key data points.
  • Multi-unit starts drove the increase, while single family housing starts remained flat.

Comments

July’s seasonally adjusted housing starts reached a lofty 294k, once again surprising the consensus of economic forecasters to the upside. The strength was led by the multi-unit sector, while single family housing starts remained flat (graph 1).

Home construction continued to rise in most regions. The maritime provinces of PEI, Nova Scotia and New Brunswick are each having a strong year, with New Brunswick reaching a new high-water mark in seasonally adjusted housing starts in July. Vancouver posted a strong gain, thanks to multi-unit homebuilding. But Montreal is the real story this month. Montreal’s housing starts are up 50% year-to-date over the same months last year, driven by strong growth in the multi-unit construction segment. Moreover, it’s significantly outperforming Toronto in sheer numbers of units, despite the latter being a much larger city. Toronto homebuilding remains well below long-run norms, with year-to-date housing starts half of what they were a year ago. Edmonton and Calgary both retreated in July but remained well above levels from a year ago.

Implications

The outlook for housing starts isn’t entirely clear, despite four consecutive months of solid prints. On the one hand, it seems that we’re in a era where all levels of government are acknowledging the housing crisis and have made significant commitments to increasing and accelerating the pace of homebuilding. Building permit data—at an all-time high in the first quarter of the year—would also indicate a construction boom ahead.

But on the other hand, there is a significant excess supply of completed and unabsorbed multi-unit residential still on the books (graph 2). Investors in large markets may continue to wait on the sidelines, given declining asking rents in key markets and elevated borrowing costs. Without enough presales, developers may not be able to obtain funding to move projects forward. While some builders are pivoting to purpose-built rental construction, the federal government’s tighter immigration targets could lead population growth to be flat or even decline slightly, cutting off much of the pipeline of new renters.

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.