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Economic News

Canada: Bad Weather Weighed on the Housing Market in January

February 18, 2026
Maëlle Boulais-Préseault
Senior Economist

Highlights

  • Residential construction started the year at a subdued pace compared with December, with 238k housing starts recorded in January 2026 (seasonally adjusted and annualized). Weak activity was noted in most major cities across the country, with the exception of Vancouver and Calgary. Table 1 below summarizes the key figures.
  • Existing home sales in Canada fell by 5.8% month‑over‑month (m/m) in January. The average price declined by 1.7% nationwide, while the benchmark price decreased by 0.9% compared with December. Table 2 presents the key data.

Comments

The weakness in housing starts in January comes as no surprise following the strong performance recorded the previous month. In fact, the January figure even exceeded our forecast (230k), albeit coming in well short of consensus (262.5k). Contrary to the trend seen over the past year, Montréal posted one of the sharpest declines, with housing starts falling by roughly 38% from January of last year. Conversely, Vancouver saw its number of units started increase by more than 38% compared with January 2025. Milder weather in Western Canada likely played a role, while two major snowstorms and a polar vortex temporarily disrupted construction activities elsewhere in the country. Uncertainty stemming from trade tensions with the United States, persistently high construction costs and slowing demand are also weighing on builders, dragging down the national average (graph 1). Despite these challenges, public policies and government financing measures are expected to continue supporting residential construction throughout the year.

As with residential construction, weather conditions also contributed to slower activity in the resale market. Home sales were down across all provinces in January. Only Calgary and Ottawa managed to eke out gains among major Canadian cities. At the same time, a sharp increase in new listings was recorded nationwide over the past month, pushing the sales‑to‑new‑listings ratio lower in most markets (graph 2). This rise in supply, combined with falling prices, could encourage many potential buyers to re‑enter the market in the coming months.

Implications

The outlook for 2026 nonetheless remains filled with uncertainties. The risks lean more toward continued stagnation—characterized by moderate sales, limited price growth, and relatively low levels of residential construction—than toward a return to an overheated market. For more details on our forecasts for 2026 and 2027, consult Desjardins’ latest Housing Outlook External link..

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.