OTTAWA — Housing starts rose more than expected to 187,200 in November, led higher by multiple-unit construction in Ontario, according to Canada Mortgage and Housing Corp.

That compares to a seasonally adjusted annual rate of 167,800 units in the previous month, and surpassed the 170,000-unit forecast by many analysts for November.

CMHC said urban starts rose 14.6 per cent to 163,100 units in November. Multiple units were up 20.9 per cent to 101,800 units, while single urban starts increased 5.5 per cent to 61,300 units.

November multiple-unit construction increased by 29,900 units in Ontario, while activity was stable in the Prairies and starts declined in other regions of the country.

"The increase in housing starts in Ontario in November was more than enough to offset declines in all other regions of the country," said CMHC chief economist Bob Dugan.

Rural starts were estimated at a seasonally adjusted annual rate of 24,100 units in November from 25,500 a month earlier.

"Looking ahead into 2011, housing starts will gradually become more closely aligned to demographic demand, which is currently estimated at about 175,000 units per year," CMHC said.

The better-than-expected performance in November followed a report earlier Wednesday from Central 1 Credit Union, which said Ontario will see strong gains in both home sales and prices in the coming year.

Home resales will increase by about five per cent to 204,000 next year, after a decline of less than one per cent this year to 194,000, it said. Prices are anticipated to rise 4.2 per cent to an average $356,500 in 2011 from $342,000 this year.

Meanwhile on Tuesday, real estate firm Re/Max said that average home prices across Canada will rise next year, although sales will flatten in most major markets.

Home prices should rise by an average three per cent to $350,000 by the end of 2011, Re/Max said.

It forecast that home sales this year would be down five per cent to 441,000, with prices growing seven per cent to $340,000. The Re/Max report said fewer homes on the market have offset the diminished demand this year, helping to keep prices rising.