Canadian Housing Starts (May 2026)

Housing starts pullback in May

• Canadian housing starts came in at 261.4k annualized units in May, marking a 6% month-on-month (m/m) decline from April's level. On a trend basis, the six-month moving average of starts remained relatively unchanged at 258.0k units. 
• May's decline was concentrated in the multi-family sector, with urban starts down 10% m/m to 205.3k units. Meanwhile, urban single-detached starts increased 13% m/m to 41.7k units.
• Urban starts were down in 6 of 10 provinces:
   
  • B.C. (-19.3k to 35.9k units) and Ontario (-14.5k to 67.3k units), drove the national decline. Starts were also off in Quebec (-9.3k to 51.7k units).  
  • Despite declines in Newfoundland and Labrador and New Brunswick, Atlantic starts rose (+5.6k to 18.8k units), lifted by Nova Scotia. Meanwhile, the gain in the Prairies (+19.8k to 73.4k units), was entirely driven by Alberta. 

Key Implications

• An as-expected pullback in May after April's elevated print, with sinking building permits pointing to additional near-term moderation. Still, starts are tracking higher in Q2 than in Q1, suggesting some upside to the residential component of GDP.
• May's drop is consistent with our view that housing starts are set to grind lower as the year wears on. Headwinds for homebuilding include weak population growth, elevated levels of unsold inventories, climbing rental vacancy rates and past weakness in pre-construction sales. The recent removal of the HST on all new builds in Ontario should spur demand, but lags between pre-sales and starts mean any boost is likely a story for 2027 and 2028.

Disclaimer

This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.