According to figures released on Friday by the national housing agency, house starts in Canada increased by 5.6% in 2025 to 259,028 units, driven by stronger-than-expected growth in December.
The annual total was the fifth-highest on record, indicating strong activity throughout the year, even as momentum began to slow near the end.
The Canada Mortgage and Housing Corporation (CMHC) reported a significant increase in December, pushing the year total over 2024 levels.
However, measurements tracking recent developments revealed a more mixed picture, with advances concentrated earlier in the year and a gradual slowdown since the autumn.
December spike exceeds estimates
In December, the seasonally adjusted annualised rate of home starts increased by 11% to 282,439 units, up from a revised 254,625 in November.
Economists projected starts to increase to 260,000, making the last month’s performance better than expected.
The December growth provided a late lift to yearly data, although it could not completely offset the softening shown in other indices.
While the headline monthly rate increased, the six-month trend fell 0.1% in December, indicating that underlying momentum deteriorated as the year ended.
According to CMHC Chief Economist Mathieu Laberge, while house starts in 2025 outpaced those in 2024 and increased in December, the majority of construction activity occurred earlier in the year.
He went on to say that the majority of the strength came in the spring and summer, and that the trend in home starts has continuously fallen since September.
Momentum front-loaded in 2025
The discrepancy between the annual gain and the slower late-year trend reveals a dwelling development cycle that was front-loaded in 2025.
Elevated activity earlier in the year increased the overall amount, whereas the closing months showed less consistent rise.
The annual level of starts remained among the highest on record, indicating vigorous building activity throughout the year.
However, the slowing trend since September indicates that builders faced a more cautious environment as the year continued, notwithstanding December’s stronger monthly result.
The contrast between the seasonally adjusted annualised rate and the six-month trend demonstrates the distinction between short-term fluctuations and overall direction.
A single month’s gain, no matter how large, did not change the progressive drop recorded in prior months.
Policy background: affordability and rates
The housing numbers come as Canadian Prime Minister Mark Carney has promised to enhance affordability, eliminate homelessness, and increase home construction.
These goals position housing supply at the forefront of the government’s policy agenda, especially as development trends show signs of slowing late this year.
At the same time, the Bank of Canada has cut its benchmark interest rate to a three-year low of 2.25% to help the economy.
The lower borrowing rates are part of the broader context in which housing construction has changed in 2025.
Lower interest rates are meant to give economic support, whereas federal plans focus on increasing housing supply and resolving affordability issues.
The interaction of these policy measures and construction activity will be closely monitored when trends emerge after the end of the year.
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