The annual rate of housing starts in April rose by 1.3 per cent to 201,700, the Canada Mortgage and Housing Corp. reported Monday.
The federal agency said the number of starts on multiple family buildings nearly offset a drop in single-family homes.
Starts in urban areas increased by 5.1 per cent to 182,500 units. Urban multiple starts rose 27.2 per cent to 98,600, while single home construction fell 12.7 per cent to 83,900.
"After contributing early and often to the overall economic recovery, we expect housing starts to moderate in the second half of this year," TD bank economist Pascal Gauthier said in a commentary.
"Total Canadian starts during the first quarter of this year were up by 10.6 per cent from the fourth quarter of 2009, but incremental gains are becoming harder to come by as the housing recovery matures," said Gauthier. "The pace has gradually been slowing."
Urban starts saw their biggest increase in British Columbia, at 16.4 per cent, followed by 6.7 on the Prairies, 4.5 per cent in Ontario and 1.1 per cent in Quebec.
They fell by 3.3 per cent in Atlantic Canada.
Gauthier predicted housing starts to start moderating this spring and by year end, to be in the range of 170,000 to 180,000 as the shortage of supply eases, especially in the resale housing market.