What are housing starts and why do they matter?
Housing starts indicate the beginning of new home construction. The Canada Mortgage and Housing Corporation (CMHC) defines them in two ways: when the concrete for the footing is poured or when construction begins without a basement.
Why are housing starts closely tracked?
New homes are big-ticket items that often increase spending on related items like appliances, furniture, and other home-related goods and services. Since housing starts tracks homes that begin construction, it is also used to estimate demand for mortgages, construction materials, and labour involved in building new homes. It is a metric that is also used to gauge economic sentiment among homebuilders. Generally, housing starts are higher when homebuilders believe the economy is doing well, and the conditions will allow them to sell more homes, and decrease when the opposite happens. Governments also use this metric to plan for infrastructure like water, electricity, roads, and schools among others. This makes housing starts an important economic indicator for economists, governments, and investors.
In Canada, the Canada Mortgage and Housing Corporation publishes monthly housing start statistics, including monthly, quarterly, and annual data. This data is divided into four types of housing units: single-detached, semi-detached, row or townhouses, and apartment or other unit types, which include multi-unit buildings like rental apartments, condos, duplexes, and quadplexes. This data is available on the CMHC website and the Statistics Canada data portal.
Canada is building more multi-unit dwellings than ever before
The type of housing units under construction provides insight into current housing needs of the population. For example, a higher proportion of apartments or condos could signal demand for more affordable housing options, and a higher share of single-detached homes could mean an appetite for larger and more expensive properties. Shifts in the demand of a particular type of housing within specific regions could also indicate changes in demographic and labour trends.
In 2024, housing starts climbed 2% from 2023 to reach 245,367 units across the country. More than one-fifth were single-detached homes, while 63% were apartments, condominiums, or other multi-unit homes with the remainder being semi-detached and row or townhomes. The number of apartments and condos starts in 2024, hit a record high, and marked eight straight years of growth within this segment of homes. The distribution of the type of homes being constructed was relatively unchanged from 2023. Of the various categories, only single-detached homes registered a decline from the year before, continuing a downward trend that began in 2021. In 2024, single-detached homes as a percentage of housing starts was 22.2%, the lowest ever.
From 1974 to 2009, more single-detached homes were built each year than all other housing types combined. However, starting in 2010, the percentage of single-detached homes starting construction on an annual basis began to decline, with annual decreases recorded in 13 of the 16 years from 2010 to 2024. In contrast, apartments and other types of housing have increased, raising their share of total housing starts from 32.4% in 2009 to 63% in 2024.
Where are new homes being constructed?
Housing starts vary greatly from province to province. About 88% of all the new housing units that began construction in 2024 were located in just four provinces: Ontario, Quebec, Alberta, and British Columbia — a reflection of their population and the size of their economies. Ontario had about 30% of the total, with 74,573 new units, about 1.5 times more than Quebec which followed with 48,713 units. Alberta had 47,827 units, and British Columbia had 45,828 units.
In 2024, the number of housing starts rose in 7 out of 10 provinces compared to the previous year. Newfoundland and Labrador had the biggest increase at 70%. Prince Edward Island’s housing starts were up 48%, New Brunswick increased by 35% and Alberta and Quebec saw rises of 32% and 25%, respectively. Meanwhile, Nova Scotia (+3%) and Manitoba (+1%) had little change. Of the three provinces that saw declines in housing starts, Ontario experienced the sharpest drop. In 2024, Ontario housing starts were 17% lower the the previous year. It’s the fifth consecutive year Ontario has recorded declines in housing starts.
Apartments and other unit types were the leading type of housing starts in every province across Canada except Newfoundland and Labrador, where the total housing starts of single-detached homes were greater than the other types of homes combined.
