Canada’s residential construction activity slowed severely in January, as the annual pace of housing starts declined by 15% compared with the previous month, according to new data released by the Canada Mortgage and Housing Corporation (CMHC).
The national housing agency reported that the seasonally adjusted annual rate (SAAR) of housing starts dropped to 238,049 units in January, down from 280,668 units in December. The decline more than erased the gains recorded at the end of 2024, flagging a cooling in new home construction activity at the start of the year.
Despite the monthly decrease, the picture was more reliable on a year-over-year basis. In urban centres with populations of 10,000 or more, actual housing starts bordered up by 1% compared with January last year. A total of 16,088 new units were started in these centres during the month, slightly higher than the 15,957 units recorded in January a year earlier.
CMHC also reported that the six-month moving average of the seasonally adjusted annual rate a measure used to smooth out monthly volatility declined by 3.5% in January to 254,794 units. The drop suggests that while construction levels remain elevated by historical standards, momentum has softened in recent months.
The housing starts data is closely watched as an indicator of economic health and housing supply conditions. Analysts note that fluctuations can be influenced by seasonal factors, financing conditions, and regional market trends.
Further updates in the coming months will provide a clearer picture of whether January’s decline marks a temporary pullback or the beginning of a broader slowdown in residential construction activity.
