Canada saw the number of new homes under construction rise by almost seven per cent in February, Canada Mortgage and Housing Corp. said Tuesday.

Builders put the shovel in the ground on almost 182,000 new homes in the second month of 2011, once seasonal variations were taken into account, CMHC said in a press release.

That compares favourably to January when Canadian home builders started work on 170,600 new rural and urban units, the national housing agency said.

"Housing starts moved higher in February because of increases in Ontario and the Prairies," said Bob Dugan, CMHC's chief economist.

The agency said the construction of new multi-family dwellings in both regions was a major factor underscoring February's gains nationally.

Regional gains

In addition, Ontario experienced a jump of nearly 30 per cent in the number of urban housing starts in February. Canada's most populous province saw 62,600 new housing starts in cities and rural areas in the month on an annualized and seasonally adjusted basis.

The latest figures represented a nice gain versus housing starts of 48,400 one month earlier.

One factor in Ontario's strong showing was the mild increase in house prices.

In Toronto, new home prices rose 2.3 per cent in December 2010 versus the same month one year earlier.  The gain in prices was slightly better than the Canadian average of 2.1 per cent comparing the two Decembers.

Still, Ontario's housing market has been subject to wide swings in past months.

For example, the province experienced a gain of more than 80 per cent in November 2010 compared to the showing one month earlier.

Canada's prairie provinces also saw housing starts up, reaching 30,000 new units in February compared to 23,800 in January.

Quebec also experienced an up market in February while British Columbia's new housing sector slid by five per cent in the month.