Housing starts drop 16 per cent in August

Canadian housing starts fell by 16 per cent last month compared to July, according to a new report from the Canadian Mortgage and Housing Corporation.

Source: Wikimedia Commons

Canadian housing starts fell by 16 per cent last month compared to July, according to a new report from the Canadian Mortgage and Housing Corporation.

The Wednesday report’s data is based on the six-month average of seasonally adjusted annual rate of total national housing starts, which dropped from 293,537 units in July to 245,791 in August.

“The slowdown in the SAAR that we saw in August is notable as it is well below the six-month trend line. If sustained, this adjustment in the level of housing starts would be consistent with both our forecast and current market intelligence indicating a slowdown in the pace of housing construction,” said CMHC’s chief economist Kevin Hughes.

“It is worth noting that current housing starts levels are generally reflective of decisions made when interest rates were receding and investor confidence was higher than it is today.”

On an annual basis, housing starts were up 10 per cent in centres with populations of 10,000 or more, with 18,408 units recorded last month, compared to 16,775 units in August 2024.

“Among Canada’s big three cities, Vancouver recorded a 46 per cent year-over-year increase in starts compared to the same month last year, driven by higher multi-unit and single-detached starts,” the report continued.

“Montreal posted a 32 per cent year-over-year increase in actual housing starts, driven by significantly higher multi-unit starts. Toronto’s housing starts were similar to August 2024.”

Last month, the housing agency forecast that housing starts would reach 237,800 this year, down from 245,367 last year and worse than pandemic levels.

The Crown corporation projected no more than 227,734 housing starts in 2026 and 220,016 in 2027.

Statistics Canada data confirms that more houses were built during the COVID-19 pandemic years, with 271,198 houses built in 2021 and 261,840 in 2022.

Despite the housing crisis being a top concern during the 2025 federal election, little has been done since.

The Liberals vowed to build 500,000 homes per year over the next decade, claiming that Canada would see the highest level of residential construction since the aftermath of the Second World War.

Former prime minister Justin Trudeau made similar promises that never came to fruition.

Prime Minister Mark Carney also pledged $25 billion for a new Crown corporation, Build Canada Homes, to provide public financing for prefab and affordable housing. He also promised an additional $10 billion in low-rate capital.

However, the CMHC report noted that “housing activity has weakened since January” with many buyers and developers taking a “wait‑and‑see” approach amid Canada’s weakening economic growth and escalating trade tensions.