TD Sees Easing in Canada's Homebuilding Next Year Despite September's Rise in Housing Starts

09:33 AM EDT, 10/16/2025 (MT Newswires) -- Canadian housing starts increased 14% month-on-month in September to an elevated 279,200 units, almost fully bouncing back from the 17% m/m drop in August, said TD.

Stripping away monthly volatility, the six-month moving average of starts increased 4.1% month over month to 277,100 units, said the bank after Thursday's data from Canada Mortgage and Housing Corporation (CMHC).

In urban markets, September's gain was driven by the multi-family sector, where starts jumped by 34,000 to 213,300 units. Meanwhile, single-detached starts edged higher by 1,000 to 41,000 units.

Last month's increase in urban starts was relatively broad-based regionally, with activity up in six of 10 provinces:

-- Ontario drove the national gain, as starts increased by 31,600 to 85,800 units. Starts also picked up in Quebec (+3,400 to 49,200 units) and the Prairies (+13,400 to an elevated 72,500 units), lifted by Alberta.

-- In contrast, starts dropped in British Columbia (-9,400 to 34,200 units), and the Atlantic (-4,100 to 12,700 units) amid broad-based drops in the latter -- with the exception of Newfoundland and Labrador.

Builders continue to break ground on new homes at a very healthy pace, with starts rising last month and remaining elevated, stated TD. However, over the past two months, they've cooled a bit on average from the ultra-robust rate observed earlier in the year -- that was supported by rental units.

They were down 3% quarter-on-quarter in Q3, about in line with what the bank expected. This will weigh on growth in the residential investment component of gross domestic product.

Peering ahead, the downward trend in building permits could signal some further moderation in the near term. TD also expects some easing in Canadian homebuilding next year amid dropping rents and weak population growth.

What's more, past declines in pre-construction home sales should keep a lid on homebuilding in the ownership market, added the bank.

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