Canada Housing Starts and Construction Data for May 2026: Analyst Deep Dive
According to the Canada Mortgage and Housing Corporation (CMHC), the six-month trend in housing starts was virtually flat in May, with a slight increase of 0.5% to 258,010 units. This trend measure is a six-month moving average of the seasonally adjusted annual rate (SAAR) of total housing starts for all areas in Canada.
Overall Housing Starts in Canada
In centres with a population of 10,000 or more, actual monthly housing starts were down 5.2% year-over-year in May, recording 22,633 units compared to 23,879 in May 2025. The year-to-date total was 93,644 units, up 3% from the same period in 2025, driven by higher starts in British Columbia and Ontario, outweighing year-over-year decreases in the Prairies.
The total monthly SAAR of housing starts for all areas in Canada decreased 6% in May (261,377 units) compared to April (278,380 units).
Units Under Construction and Completions
In centres with a population of 50,000 or more, the number of units under construction rose 0.9% month-over-month to 374,662 units in May. Completions also increased, with construction finished on 16,880 units, up 10.6% compared to April. The number of units with approved building permits but not yet started fell 2.4% month-over-month to 138,842 units in May.
Analyst Commentary: The combination of surging completions (+22% in Quebec and B.C.) alongside plunging approved-but-not-started units (-2.4% nationally, -17.4% in the Atlantic provinces) reveals a critical market dynamic: developers are aggressively liquidating 2–3 years of backlog inventory to raise cash amid the high-interest-rate cliff. Mortgage renewals from 2023–2024 are creating severe negative cash flow pressure, and developers simply dare not break ground on new projects. This is not a sign of market prosperity—it signals weakening future supply momentum.
CMHC Deputy Chief Economist Aled Ab Iorwerth stated: “May’s data showed mixed results. Year-to-date housing starts are slightly up from last year, and the monthly starts trend was basically flat, while units under construction and completions increased. Overall, these results suggest that construction activity is uneven and taken together with the decline of approved units not yet started and market intelligence point to weaker momentum for future supply.”
Key City Performance
In rural areas, the monthly SAAR estimate was 14,357 units.
Among Canada’s three biggest CMAs:
- Montreal: 18% year-over-year increase in actual housing starts, driven by higher multi-unit.
- Vancouver: 7% decrease due to lower multi-unit starts.
- Toronto: Starts decreased 12%.
| Core City | YTD Starts Change (Jan–May) | Current Market Status | HousingAI Sentiment Rating |
|---|---|---|---|
| Toronto (GTA) | Continued decline / multi-unit volatility | High construction costs, severe condo oversupply | Bearish |
| Montreal (GMA) | +4% (actual starts +18% YoY) | Multi-unit deliveries at record highs, market steadily absorbing | Neutral-Bullish |
| Calgary | -28% (sharp pullback from peak) | Overbuilding in prior cycle, affordability constraints on grassroots buyers | Correction |
| Vancouver | -7% multi-unit decline | Persistent high construction costs, weakening demand | Bearish |
| Ottawa-Gatineau | +1% (essentially flat) | Gatineau driving growth (+41%), Ottawa softening (-10%) | Neutral |
| Halifax | -34% | Prior cycle overheating, demand cooling sharply | Bearish |
| Edmonton | -14% (but outperforming Calgary) | More resilient than peer prairie cities | Neutral |
| Kitchener-CW | +106% | Explosive multi-unit growth, absorbing population influx | Bullish |
Provincial Data Overview (Centres 50,000+ Population)
Atlantic Provinces: Approved units awaiting starts fell 17.4% month-over-month, units under construction rose 3.6%, completions fell 10.6%.
Quebec: Approved units fell 2.8%, units under construction rose 2.8% to 60,626, completions surged 22% to 3,371 units.
Ontario: Approved units fell 2.9%, units under construction rose 0.7% to 150,477, completions up 2.6%.
Prairies: Approved units fell 1.9%, units under construction rose 2.7%, completions up 5.5%. Alberta completions grew 15% to 4,065 units.
British Columbia: Approved units essentially flat (-0.1%), units under construction fell 1.9%, but completions surged 22.3% to 4,161 units.
Single-Family vs. Multi-Unit Supply-Demand Mismatch
A critical structural imbalance is emerging: single-detached housing starts are down 8% year-over-year (13,958 units YTD in 2026 vs. 15,141 in the same period of 2025), while multi-unit starts are up 5% (79,686 vs. 75,978). High-density condos continue to be built at scale, but the buyers most in need—young families facing persistent inflation—actually require single-family and townhouse homes. This means condo unsold inventory will continue to accumulate over the next 2–3 years, while the shortage of low-density housing will worsen.
Major City Year-to-Date Performance (Jan–May 2025 vs. 2026)
Canada-wide (10,000+ population): Total starts of 93,644 units in the first five months of 2026, up 3% year-over-year. Single-detached starts were 13,958 (down 8%), while all other types (multi-unit, etc.) were 79,686 (up 5%).
Ontario: 26,084 units, up 18% year-over-year, driven by a 22% increase in multi-unit starts. Quebec: 22,125 units, up 5%.
Alberta: 17,783 units, down 21%. Saskatchewan: 2,043 units, down 15%.
British Columbia: 17,283 units, up 15%.
Key cities YTD:
- Calgary: 8,981 units, down 28%
- Edmonton: 7,048 units, down 14%
- Montreal: 10,402 units, up 4%
- Toronto: Data heavily influenced by multi-unit volatility
- Vancouver: Ongoing pressure from high construction costs and weakening demand
- Ottawa-Gatineau: 5,301 units, essentially flat (+1%)
- Halifax: 1,858 units, down 34%
Future Outlook
CMHC forecasts total national housing starts at approximately 247,000 units for 2026, down from the 2025 estimate of 259,000 units. 2027 will decline further to approximately 223,000—below the ten-year average. Developers face mounting challenges including rising construction costs, weakening demand, and increasing unsold inventory, particularly in the townhouse and condominium segments.
CMHC notes that Canada still needs approximately 3.5 million additional housing units by 2030. While rental construction remains at elevated levels, the continued decline in single-detached starts may exacerbate future housing supply shortages.
CMHC’s forecast of consecutive declines in housing starts through 2026–2027 reveals an emerging “gap” in new housing supply across Canada’s core markets. Yet the tail end of the high-interest-rate cycle is not over—many investors who entered the market at peak prices in 2023–2024 with multi-unit townhouses and pre-construction condo projects are facing severe negative cash flow pressure.
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→ [Enter HousingAI.ca Decision Dashboard] to instantly generate your free multi-city absorption rate and long-term supply-demand projection report.
Data Sources
This analysis is based on data from the Canada Mortgage and Housing Corporation (CMHC) Starts and Completions Survey (SCS). The June housing starts data will be released on July 16 at 8:15 AM ET.