Canadian Housing Starts (May 2025)

Housing starts remained elevated in May

• Canadian housing starts came in at a healthy rate of 279.5k annualized units in May, essentially holding on to April's large gain. Meanwhile, the six-month moving average of starts inched higher by 0.8% m/m to 243.4k units. 
• In urban markets, May's performance was evenly split across the multi-family and single-detached sectors, with the former rising by 2k to 217.3k units, while the latter declined by the same amount to 42.5k units.
• Urban starts were up in 5 of 10 provinces:
  • Starts rose strongly in Quebec (+10k to 61k units) while inching higher in Ontario (+1.8k to 66k units). They also increased in the Prairies (+6.2k to 81k units), lifted by Manitoba and Alberta.
  • Starts dropped in the Atlantic (-2.3k to 16k units), weighed down by Newfoundland and Labrador, PEI and Nova Scotia. They also pulled back significantly in B.C. (-15.4k to 36k units).

Key Implications

• With May's solid level, housing starts are on track to increase in the second quarter. This bodes well for residential investment and should help offset some softness on this component coming through from home sales. 
• Elevated building permits suggest that homebuilding can maintain a healthy pace in the near-term, but we don't expect this to last. Homebuilding should cool moving forward as slower population growth, falling rents in key markets, high construction costs, and past declines in home sales weigh on activity.           

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