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Economic News

Canada: April’s Homebuilding Hammered Expectations

May 15, 2025
Kari Norman
Economist

Highlights

  • The pace of housing starts in Canada skyrocketed to 278.6k (saar) in April. Table 1 summarizes key data points.
  • In the resale market, home sales in Canada were flat at -0.1% m/m in April. The average sale price was about the same as in March while the benchmark price fell marginally. Both remain well below their peaks. Table 2 summarizes key data points.
  • We're tracking real GDP growth in Q1 slightly below the Bank of Canada’s estimate of 1.8% in its latest Monetary Policy Report.

Implications

April’s seasonally adjusted 278.6k housing starts were up 30% from the prior month and blew the consensus of economic forecasters (235k) out of the water (graph 1). However, we remain firm in the belief that this large increase in month-to-month data speaks to natural fluctuations of multi-unit starts and their reporting dates, rather than an indication of a turnaround in the sector. The first four months of the year were 3% lower than the same period a year ago. 

The multi-unit sector accounted for most of April’s growth in housing starts, while single-family home construction rose slightly from March. Provincially, home construction saw strong gains in Ontario and BC, though both provinces’ year-to-date homebuilding lags the same period last year. Quebec starts were up slightly in April, and year-to-date figures have been strong in Montreal and the province as a whole.

Completed and unabsorbed units are trending higher in the multi-unit sector (graph 2). This may put downward pressure on new residential construction going forward until some of this inventory is taken off the developers’ books.

In the resale market, April marked the fifth straight month of declining home sales, remaining at the low end of seasonal norms. We believe that many of those waiting on the sidelines last year for mortgage rates to start coming down are now hesitating due to the economic uncertainty of a trade war.

New listings declined by 1.0% from March, while inventory ticked up to 5.1 months. Putting these together meant there was little pressure on prices. The benchmark price fell back to its lowest point since May 2021.

Regional differences remained significant. In sharp contrast to the national average, home sales in Quebec City forged ahead in April, with sales and prices both up significantly year-to-date as compared to the same period a year ago (10% and 18% respectively). Despite a marginal increase in sales, Toronto remains in the deepest buyer’s market territory since 1991 (graph 3). Vancouver also favours buyers, while Edmonton and Halifax linger close to a seller’s market. 

Looking forward, we expect homeownership to remain largely unaffordable despite favourable mortgage rates and home prices (see our recent report External link.). In residential construction, our work External link. found that the homebuilding industry will likely need to adjust to tariffs by diversifying supply chains, finding local substitutes and improving efficiency.

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.