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Economic News

Canada: February Rebound in Housing Starts Hints at a Possible Early Spring Thaw

March 15, 2024
Kari Norman


  • Housing starts in Canada rebounded in February, to 253k (saar), with a significant upsurge in multi-unit housing leading the way. The table below summarizes key data points.
  • Our tracking suggests real annualized GDP growth in the range of 1% to 1.5% annualized in the first quarter of 2024. That’s more than the Bank of Canada’s forecast of 0.5% published in January.


Despite the heavy influence of the prevailing high interest rate environment, the Canadian housing market continues to forge ahead (graph). Significant variation across regions highlights the nature of housing, where local conditions dictate market dynamics. The pace of construction picked up in Ontario, Alberta and BC, while pulling back slightly in Quebec.

Often volatile multi-unit residential construction continued to dominate housing starts, up almost 15% so far this year over the same period a year ago. Single-unit starts, on the other hand, are down nearly 9% year-to-date as compared to these same months last year. This may reflect a shift toward more economically viable housing solutions in an era of sustained elevated home prices paired with high interest rates. Moreover, it aligns with urban planning goals aimed at sustainable and efficient land use. The spring construction season will no doubt benefit from the unseasonably warm weather at the start of 2024 as well.

Historically new construction typically closely follows home purchases. Though that was not the case in 2022–23, home sales External link. strength mirrored a pickup in starts more recently. Next week’s expected housing sales data release will show whether this trend continues in February.

With inflation slowing External link., the Bank has begun to soften its tone External link.. Even with the February uptick in housing starts, we remain of the view that the Bank of Canada will begin to gradually unwind interest rate hikes starting in June. Nonetheless, we don’t anticipate a surge in construction activity in 2024 despite some relief in borrowing costs that less restrictive monetary policy would provide. The construction industry continues to suffer from labour shortages, weak homebuilder sentiment and inflation in building materials costs. Indeed, we expect External link. that housing starts won’t return to 2023 levels for the next several years.

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.