The seasonally adjusted annual rate of housing starts climbed to 279,234 units, significantly exceeding economists’ expectations of around 255,000.
The sharp rise was largely driven by new builds in Ontario, Quebec, and the Prairie provinces, reflecting renewed momentum in major urban centres despite ongoing challenges in the broader housing sector. Montreal and Toronto alone accounted for more than a quarter of all housing starts nationally, fuelled primarily by a spike in the construction of rental apartments.
In cities with populations above 10,000, the annual pace of new builds rose to 254,345 units in September, a 16 per cent increase from the previous month. Rural starts were estimated at nearly 25,000 units. Overall, Canada’s six-month trend in housing starts has strengthened, even as the resale market shows signs of cooling.
For developers and construction professionals, the growth in rental housing activity is particularly noteworthy. Demand for purpose-built rentals continues to outpace ownership housing, as high borrowing costs and affordability challenges push more Canadians toward renting. This shift has prompted developers to pivot toward multi-unit residential projects, which are now leading overall construction activity.
Economists note that while September’s figures demonstrate resilience, they largely reflect project decisions made months or even years ago when financing conditions were more favourable. Current economic headwinds, including elevated interest rates and tighter credit conditions, could temper future growth in new builds.
On a twelve-month basis, national housing starts have averaged around 256,000 units, marking a steady recovery from earlier lows in the year. However, Ontario continues to lag, averaging just 63,000 new starts over the same period.
For tax and business professionals, the latest data underscores ongoing structural shifts in Canada’s housing market. The surge in rental development highlights opportunities for investors and builders, but also points to evolving financial considerations, including new tax treatments, cost management strategies, and long-term planning for multi-residential assets.
Despite a challenging environment, Canada’s construction sector continues to demonstrate remarkable adaptability and resilience heading into the final quarter of the year.
Contact Accountancy Insurance
We would love to hear from you.
About Accountancy Insurance
Thousands of accounting firms offer our tax audit insurance solution, Audit Shield to their clients.
Find out why.