“However, the drop was sharper when compared with March 2025, with investment in residential real estate construction dropping 2.2%, while the non-residential sector saw a modest 0.6% increase,” Statistics Canada said.

“In the residential sector, investment in construction dropped to USD 15.5 billion in March, decreasing by USD 345.4 million. While multi-unit housing construction saw a 2.3% decline, single-family homes were not untouched by the downturn, seeing investment decline by 2.1% in March,” the national statistical agency noted further.

Investment in multi-unit construction, on the other hand, was down USD 195.5 million to USD 8.4 billion in March, marking the third consecutive monthly decrease. Investment in single-family home construction reduced USD 149.9 million to USD 7.2 billion.

“Ontario led the declines across the board in residential construction, with investment in multi-unit properties in the province dropping by USD 152.2 million, significantly higher than the province with the next highest drop – Alberta, with a USD 59 million decline,” Statistics Canada remarked.

Ontario also led the decrease in single-family home construction, with investment declining by USD 119.5 million.

The report from Statistics Canada also coincides with the Canada Mortgage and Housing Corporation’s (CHMC) “Housing Market Outlook for 2026”, where the agency said new home construction in the North American country will continue to decline until 2028, citing factors like high costs for developers, weaker demand and more unsold homes.

“In 2025, 259,000 homes began construction across Canada. That number is projected to fall to 247,000 this year, 223,000 in 2027 and 216,000 in 2028. Condominium starts will be especially weak,” CMHC said.

Canada’s condo (privately owned individual unit within a larger residential complex or building) market downturn has entered its fifth year, recent data from real estate research firm Urbanation shows.

“In a typical year, based on the 10-year average, there would be 4,046 condos sold in the Greater Toronto Hamilton Area (GTHA) in the first three months of the year. Between January and March of 2026, that number was 246,” the company noted.

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The Monetary Policy Committee’s 3-day session seems to have taken into account the challenging global environment as well as the consumer inflation which is also well above the comfort levels for the central bank. The vote for a hike could also have been aided by the increased crude oil prices. Though the govt. has been passing on the hikes to date, a further hike may be very difficult to pass on which may have put additional pressure on the govt.

The hike may seem to dampen sentiments in the market but in terms of real estate may have little or no impact. As almost all home loans these days are on floating rates, the rise and fall in home loan rates does not impact the performance of residential real estate sector much and tends to balance each other out over long term. As buying decisions are generally not taken based on fluctuations in home loan rates, there will be very little effect on the real estate market. Though for some home buyers looking towards making a very low ticket size purchase decision, there may be some tentativeness in the decision making, overall we will see minimal impact on the end-user in the housing sector.

Ramesh Nair is CEO & Country Head at JLL India

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