The Canadian housing sector continued to show solid growth in February as housing starts moved up about 6.5 per cent from the previous month.

Canada Mortgage and Housing Corp. said the seasonally adjusted annual rate of starts came in at 181,900 units, up from 170,600 units in January.

CMHC said the rise was due primarily to increased activity in the multi-family starts in Ontario and the Prairies.

The seasonally adjusted annual rate of urban starts increased by 9.4 per cent to 161,000 units in February. Urban multiple starts were up by 14.5 per cent in February to 94,900 units, while single urban starts edged higher by three per cent to 66,100 units.

Rural starts were estimated at a seasonally adjusted annual rate of 20,900 units in February.

Despite the better than expected growth in housing starts, analysts caution that the pace will slow during 2011.

“We continue to expect a softening in overall housing starts, particularly with the anticipated higher interest rates and a slower second half of the year keeping home prices under wraps,” said CIBC World Markets economist Krishen Rangasamy.