Canadian Housing Starts (February 2025)

Housing starts dropped in February

• Canadian housing starts came in at 229.0k annualized units in February, marking a 4% month-on-month (m/m) decline from January's level. However, the six-month moving average of starts increased by 1% m/m, reflecting revisions to prior months. 
• February's decline was concentrated in the multi-family sector, with urban starts down 6% m/m to 166.5k units. Meanwhile, urban single-detached starts declined by 1% to 43.3k units. 
• Urban starts were down in 5 of 10 provinces: 
  • Starts tumbled in Quebec (-12.8k to 44.7k units) and also dropped notably in B.C. (-9.2k to 29.7k units). Elsewhere, they were flat in the Atlantic. 
  • Starts picked up in the Prairies (+10.2k to 63.2k units), supported by gains in Alberta and Saskatchewan. Starts also edged higher in Ontario (+1.5k to 58.8k units), but remain at low levels.

Key Implications

• Housing starts surprised market consensus to the downside in February and have dropped 5% compared to their fourth quarter average so far in Q1. This raises the risk that homebuilding will downwardly pressure residential investment and GDP growth in the first quarter. 
• Housing starts were elevated on a trend basis last month, although are likely to trend lower moving forward reflecting uncertainty, upwardly pressured construction costs, and slower population growth. We've also received recent indications that home sales are weakening, which would also weigh on homebuilding if sustained.           

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