Canada's Weaker Q1 Housing Starts Likely to Weigh on GDP, Says TD

06:09 AM EDT, 04/20/2026 (MT Newswires) -- Canadian housing starts decreased to 235,900 annualized units in March, down 6% month over month, said TD after Friday's data from the Canada Mortgage and Housing Corp. (CMHC).

The volatile starts data pulled back in March after the prior month's gain. For Q1 overall, housing starts were down 6% -- not annualized -- signaling that they will likely weigh on Q1 residential investment and overall GDP growth, noted the bank.

On a trend basis, starts are well down from their September 2025 high. This downtrend should be sustained through the remainder of this year amid soft population growth, elevated unsold inventories, and weak past pre-sales activity in key markets such as the Greater Toronto Area, stated TD.

Upcoming government policies to remove the GST/HST on new homes and reduce development charges in Ontario should spur demand for newly built housing, added the bank.

However, some of the lift to starts from these policies could come after this year, given typical lags between pre-sales and starts, according to TD.

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