Housing construction activity decreased by seven percent in March compared to February, according to the Canada Mortgage and Housing Corporation (CMHC).

In March, Canada's housing starts experienced a seven percent decline compared to February, with the seasonally adjusted annual rate reaching 242,195 units versus 260,047 units the previous month. Year-over-year figures, however, showed a 16 percent increase in housing starts in major urban areas, driven mainly by a rise in multi-unit and single-detached starts. Toronto and Vancouver saw notable year-over-year increases in housing starts, while Montreal experienced a slight decrease due to lower multi-unit starts.

Despite the month-to-month decrease, housing starts remain solidly supported by high prices and strong pre-construction sales. TD economist Rishi Sondhi predicts further declines in housing starts ahead, influenced by weakening pre-sales activity and tightening borrowing conditions. Additionally, challenges such as construction labor shortages, material inflation, and subdued homebuilder sentiment may temper the housing market's momentum in 2024, even with anticipated interest rate adjustments starting in June.