Canada's Housing Starts Pull Back in August, But Still Highly Elevated, Says TD

09:17 AM EDT, 09/16/2025 (MT Newswires) -- Canadian housing starts declined 16% month-on-month in August, clocking in at a still-healthy 245,800 units, said TD.

Stripping away monthly volatility, the six-month moving average of starts increased 1.6% month over month to 267,300 units, noted the bank after Tuesday's Canada Mortgage and Housing Corporation (CMHC) data.

In urban markets, August's moderation was driven by the multi-family sector, where starts plunged by 46,900 to 183,40 units from their sky-high July level. Meanwhile, single-detached starts dipped 1,800 to 40,300 units.

August's starts decline was broad-based regionally, with activity down in nine of 10 provinces:

-- Ontario (-18,100 to 56,100 units) and the Atlantic (-12,900 to 15,600 units) were the largest contributors to August's drop. Starts also fell in British Columbia (-10,700 to 43,800 units), Quebec (-6,100k to 49,500 units), and most of the Prairies (-800 to 58,800 units).

-- Only Manitoba saw starts rise in August (+3,600 to 8,600 units).

The pace of starts cooled last month, pointed out TD. That said, they remain "highly elevated2 on a trend basis, lifted by rental construction. Investment in rental units has been supported by elevated rents in several markets, supportive government financing programs, and tax breaks on the construction of this type of housing.

Looking ahead, stable building permits point to a maintenance of the healthy starts trend in the near-term. However, the bank expects some moderation in homebuilding in 2026 amid slowing population growth and falling rents.

Meanwhile, past declines in pre-construction home sales should keep a lid on construction in the ownership market, added TD.

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