TD Says Canada's Housing Starts Flare Higher to End 2025

09:18 AM EST, 01/16/2026 (MT Newswires) -- Canadian housing starts came in at a "robust" 282,400 annualized units in December, marking an 11% month-over-month increase from November's level, said TD.

The picture was unchanged on a trend basis, however, with the six-month moving average of starts clocking in at 264,400 units, the bank added.

TD noted December's gain was concentrated in the multi-family sector, with urban starts up 14% month over month to 231,000 units. Meanwhile, urban single-detached starts were flat at 39,100 units. It also noted urban starts were up in 6 of 10 provinces.

In looking at the key implications, TD said December's "firm" gain leaves starts "highly elevated" when compared with historical trends and likely reflects momentum in purpose-built rental construction However, the bank noted starts were still about 6% lower quarter-on-quarter in Q4. It added that, when paired with the decline in home sales, flags a decline in residential investment in Q4 2025, in line with it own view.

TD noted December's gain was also concentrated in Ontario, where construction costs are elevated and pre-sales activity continues to be weak, meaning last month's gain is likely unsustainable, stated TD. This message was echoed in the latest building permits report, which showed a steep pullback in building permits in Ontario in November 2025, it also noted.

Moving forward, the bank thinks that Canadian housing starts will moderate this year due to sharply slower population growth, rising vacancy rates across several regions, climbing unsold inventories, and weak pre-construction sales activity in the Greater Toronto Area market.

On the other hand, federal initiatives like Building Canada Homes could provide upside support, it added.

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