A worker constructs a house in October. Housing starts increased to an annual rate of 186,300 units in January. (Canadian Press)

The seasonally adjusted annual rate of housing starts reached 186,300 units in January, up 5.8 per cent from 176,100 in December.

For 2009 overall, construction began with 149,081 housing units, with activity progressing as the year went along, the Canada Mortgage and Housing Corporation said Monday.

“Housing starts improved in both the singles and multiples segments in January," CMHC economist Bob Dugan said.

The January figure was higher than the consensus 180,000 units that economists at Canada's biggest banks had been expecting.

Real estate construction activity is now more than 50 per cent higher than where it was during its recessionary low of April 2009, BMO economist Robert Kavcic noted.

In urban areas, starts increased by 4.4 per cent to 165,200 units in January. Within that, urban multiple starts — which include condominiums — increased by 5.7 per cent to 76,300 units while single urban starts increased by 3.3 per cent to 88,900 units.

Regional variance

Rural starts were estimated at a seasonally adjusted annual rate of 21,100 units for the month.

Regionally, British Columbia led the way, as the seasonally adjusted annual rate of urban starts increased by 19.8 per cent in the province. Starts increased by 7.3 per cent in Quebec, by 2.3 per cent in Atlantic Canada, and by 1.5 per cent in the Ontario. In the Prairie region, the seasonally adjusted annual rate of urban starts decreased by 4.8 per cent.

"New home sales should taper off in July as buyers are jumping the HST gun in B.C. and Ontario, and those same buyers are also likely pulling forward some purchases given well-ingrained expectations of rate hikes in the second half of the year," Kavcic said.