Housing Starts Dip Across Canada While Ontario Sees a Small but Notable Increase
Mixed Signals Across the Country as Construction Momentum Slows
Canada’s residential construction activity continues to soften, with the latest data from the Canada Mortgage and Housing Corporation (CMHC) showing a nationwide decline in housing starts, even as Ontario posts a modest increase.
According to CMHC, the six‑month trend in housing starts fell 3.5% in January 2026 to 254,794 units, marking the fourth consecutive monthly decline. This trend reflects the seasonally adjusted annual rate (SAAR) averaged over six months, offering a more stable measure of construction activity compared to volatile monthly figures.
Ontario Shows a Small Rebound After Years of Decline
Despite national slowing, Ontario recorded a 12% increase in new housing starts compared to January 2025, a rare sign of life after several years of pullback driven by weak pre‑construction sales and tightening market conditions.
However, the growth was uneven:
- 550 single‑detached homes started construction across the province, still low by historical standards.
- Oversupply and lower demand continue to weigh on standalone home construction.
- Overall activity remains far below levels needed to meet provincial housing targets.
National Housing Starts Fall Sharply Month‑to‑Month
Across Canada, the monthly SAAR fell dramatically:
- 238,049 units in January 2026, down from 280,668 in December 2025, a 15% drop.
- Actual housing starts in urban centres (population 10,000+) were essentially flat, up just 1% year‑over‑year (16,088 units vs. 15,957).
CMHC’s Deputy Chief Economist, Tania Bourassa‑Ochoa, noted that construction momentum is clearly weakening:
“We expect new construction to continue trending lower as trade uncertainty, rising costs, weaker demand, and growing inventories constrain developer activity.”
Her remarks underline what many in the industry have been experiencing on the ground, cautious lenders, slowed sales absorption, and narrowing margins.
Rural Starts Remain Modest
Rural areas recorded an estimated 20,485 units (SAAR), reflecting stable but low‑impact contributions to overall housing supply.
What This Means for the Construction Market
The data paints a picture of slowing national construction activity, driven by:
- High construction and financing costs
- Global trade uncertainties
- Oversupply in certain segments
- Sluggish pre‑construction sales
- Rising inventories making developers hesitant to launch new projects
Near‑term improvements in housing supply appear unlikely without better market conditions or further incentives.
How Does This Affect You?
Homeowners
- Slower national construction may stabilize prices in some regions, but fewer new homes coming online could maintain market pressure in high‑demand areas.
- Ontario’s slight rebound suggests regional variations, especially in GTA and surrounding communities.
Builders & Developers
- Expect continued caution from lenders, longer absorption periods, and more scrutiny on project viability.
- Single‑detached construction remains challenging; multiplexes, laneway suites, and mid‑rise options may offer better feasibility in today’s environment.
Commercial Property Owners
- Slower residential construction could shift labour and material availability, potentially helping certain commercial projects.
- Transit‑adjacent developments may still perform well, especially in municipalities pushing density.
UTES Design & Build: Planning Ahead in a Shifting Market
Fluctuations in housing starts can affect timelines, budgets, and feasibility, but strategic design and engineering can help mitigate risks.
At UTES Design & Build, we:
- Evaluate market conditions when planning custom homes, multiplexes, additions, and commercial builds
- Optimize designs to reduce cost pressures and improve constructability
- Navigate municipal approvals efficiently, even in uncertain market cycles
- Provide end‑to‑end architectural and structural engineering expertise to keep projects moving
Contact us today to discuss how current market conditions may influence your project, and how to plan proactively for 2026 and beyond.
