Key Insights from March’s Canadian Housing Data

1. Starts trend softens, but underlying construction activity remains resilient: The national trend in housing starts declined 2.9% in March to 248,378 units, indicating a modest cooling in momentum following February’s stability. However, actual housing starts increased 9.9% year-over-year in centres with populations over 10,000, extending the pattern of underlying resilience in construction activity. This divergence suggests that developers are still advancing projects already in the pipeline, particularly in urban markets.

2. Urban, multi-unit development continues to anchor growth in major markets: Construction gains were heavily concentrated in Canada’s largest cities, with Montréal (+26%), Vancouver (+21%), and Toronto (+23%) all posting strong year-over-year increases in starts, primarily driven by multi-unit development. However, forward-looking supply risk is becoming more acute in the Greater Toronto Area, where recent reporting indicates effectively no new condo project launches, highlighting a sharp pullback in developer activity tied to weak presale demand. This disconnect suggests a potential supply cliff in 2027–2028 if conditions persist.

3. Resale market stagnation persists as higher mortgage rates dampen demand: National home sales were effectively unchanged month-over-month (-0.1%) and declined 2.3% year-over-year, signalling continued weakness in transaction activity. The mid-month increase in fixed mortgage rates, linked to renewed inflation pressures, has further eroded buyer confidence during what is typically the start of the spring market.

4. Prices continue to drift downward, though pace of decline is moderating: The MLS® Home Price Index declined 0.4% month-over-month and 4.7% year-over-year in March, extending the ongoing correction but at a slower pace than earlier in 2026. The national average home price was down 0.8% year-over-year. This moderation in price declines, alongside tightening sale-to-list price ratios suggests early signs of stabilization, though still within a weak demand environment.

We’ll continue to monitor the data and will share another update as soon as April numbers are released. Stay tuned.