Canadian housing starts fell to 153,500 units in January from 172,200 in December, with the Prairies experiencing the greatest decline, the Canada Mortgage and Housing Corporation said Monday.

"To a certain extent, the decline in housing starts coincides with recent developments in the existing home market," chief economist Bob Dugan said in a release.

"Reduced sales and increased listings in the existing home market have led to reduced spillover demand in the new home market."

City condo starts decreased 12.2 per cent to 76,700 units, while single-family home starts fell 20.2 per cent to 50,000 units in January.

The Prairies endured the greatest drop at 30.3 per cent, followed closely by British Columbia at 29.1 per cent and Ontario at 14.6 per cent. Quebec's housing starts saw the smallest decline at 1.4 per cent.

Figures from the Canadian Real Estate Association released Monday predict national home sales will likely decline in 2009 before rebounding in 2010.

Home sales declined just over 17 per cent in 2008, and sales are forecast to fall an additional 16.9 per cent to 360,900 units in 2009, according to the association's numbers. That would be the lowest level for national sales activity since the year 2000.

The association says it expects home sales to rebound by 9.9 per cent to 396,600 units in 2010, marked by an acceleration in activity in the second half of that year. The rebound next year is forecast to be the biggest in British Columbia and Alberta.