Canadian Housing Starts (January 2026)

Housing starts more than give back December's gain in January

• Canadian housing starts fell to 238.1k annualized units in January, down 15% month-on-month (m/m). This more-than-offset December's 10% m/m gain. The six-month moving average of starts declined 3.5% m/m to 254.8k units. 
• January's decline was concentrated in the multi-family sector, with urban starts down 23% m/m to 177.0k units. Urban single-detached starts were up 4% m/m to 41.2k units.
• Urban starts were down in 5 of 10 provinces:
  • Starts tumbled in Ontario (-30.7k to 63.2k units), Quebec (-21.7k to 39.4k units), Nova Scotia (-5.6k to 4.9k units) and Saskatchewan (-2.2k to 3.2k units), while dipping in Manitoba (-0.1k to 3.6k units).
  • In contrast, comparatively firm gains were recorded in Alberta (+3.8k to 44.8k units) and B.C. (+5.1k to 51.4k units). Meanwhile, other parts of Atlantic Canada recorded relatively modest increases.

Key Implications

• We had anticipated some payback last month after December's solid print. January's decline (coupled with what should be a weak resale report for the month when the data are released later this week), suggests that the residential investment component of GDP began the year on the back foot. However, winter storms in Central and Atlantic Canada likely negatively impacted homebuilding last month, pushing starts lower in jurisdictions like Quebec and Ontario.
• A bounce-back in starts in February looks like a solid bet after January's weather-influenced decline and December's increase in building permits. However, even with a probable increase in February, housing starts will likely fall moving forward on the back of higher vacancy rates in several markets, rising unsold inventories, weak pre-construction sales activity in the GTA, and very slow population growth.     

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