Canada: For Housing Starts, the Trend Is Not Your Friend

Housing starts fell to an annualized level of 214K units in March 2023, down 11% from February. Urban single-detached starts dropped by 16% to 41K units in March, while urban multi-unit starts fell by a more modest 11% to 152K units in the month. The decline in housing starts was felt across the country, with all provinces but BC (40%) and New Brunswick (18%) seeing a decline in the month.

After a surprise increase in February, housing starts came back to earth in March (graph). Indeed, the most recent month’s number of starts was the lowest since the early days of the pandemic in June 2020.

Today’s news that housing starts continue to trend lower should satisfy the Bank of Canada’s desire to see activity in interest-rate sensitive sectors slow further. Along with the rapid slowing in March headline inflation published yesterday, this provides further support for our view that the Bank will remain on hold before cutting around the turn of the year.