Canadian Housing Starts Remain Steady in May 2025: A Closer Look at National and BC Trends

In May 2025, Canadian housing starts held steady, showing minimal change from the previous month with a seasonally adjusted annual rate (SAAR) of 279,510 units. This figure reflects a 4% increase compared to May 2024, indicating a modest year-over-year improvement in housing construction activity. However, a deeper dive into the data reveals contrasting trends between single-detached and multi-family starts, as well as significant regional variations, particularly in British Columbia.

National Housing Starts: A Mixed Picture

Nationally, housing starts painted a mixed picture in May 2025:

• Single-detached starts declined by 6% month-over-month, totaling 55,161 units (SAAR). This drop suggests cooling demand or rising costs for traditional single-family homes.

• Multi-family and other starts, which include apartments and condos, edged up by 1% to 224,350 units (SAAR). This slight increase highlights sustained interest in higher-density housing, likely driven by affordability challenges and urban growth.

The overall flat month-over-month performance masks these diverging trends, with multi-family construction continuing to dominate the housing landscape.

British Columbia: Sharp Declines and Regional Disparities

In British Columbia, housing starts took a notable hit, dropping by 29% from April to 37,455 units (SAAR). This decline was widespread across the province and marked a 19% decrease compared to May 2024. Breaking it down further:

• In areas with populations of 10,000 or more:

  • Single-detached starts saw a modest 2% increase to 3,657 units, offering a small bright spot for traditional home construction.

  • Multi-family starts plummeted by 33% to 31,987 units, reflecting a significant slowdown in apartment and condo projects.

Year-to-date figures highlight stark regional differences within BC:

• Abbotsford stands out with an impressive 87% increase in starts, signaling robust local demand or development incentives.

• Nanaimo, however, saw starts plunge by 75%, pointing to potential economic or regulatory challenges.

• Kelowna (-45%), Vancouver (-23%), and Victoria (-12%) also recorded declines, underscoring uneven recovery across BC’s major urban centers.

What’s Driving These Trends?

Several factors likely contributed to the May 2025 housing starts data:

1. Affordability Pressures: High construction costs and elevated interest rates may be dampening single-detached home starts, pushing developers toward multi-family projects that offer better economies of scale.

2. Urbanization and Policy: Strong multi-family starts nationally align with government policies promoting densification in urban areas, though BC’s sharp drop suggests local hurdles, such as zoning or permitting delays.

3. Regional Dynamics: Abbotsford’s surge contrasts with declines in Nanaimo and Kelowna, reflecting localized factors like population growth, infrastructure investment, or market saturation.

Looking Ahead

The flat national housing starts in May 2025 suggest a cautious but stable housing construction sector. While multi-family starts continue to drive activity, the decline in single-detached homes raises questions about affordability and access to traditional homeownership. In British Columbia, the sharp drop in starts, particularly in multi-family units, warrants close monitoring, as it could signal broader challenges in meeting housing demand.

Policymakers, developers, and investors will need to navigate these trends carefully. Incentives for multi-family construction, streamlined permitting processes, and targeted support for struggling regions like Nanaimo could help balance the market. Meanwhile, Abbotsford’s success offers a potential blueprint for fostering growth in other areas.

Stay tuned for next month’s data, which will provide further insights into whether these trends persist or shift in response to economic and policy developments.