Nov. 10 (Bloomberg) -- Canadian new-home starts fell less than anticipated in October, while contractors managed to raise prices for new homes a month earlier, suggesting the country's housing market remains resilient.

The October total of 211,800 units on an annualized basis compares with a revised 218,600 the month before, Canada Mortgage and Housing Corp. said today from Ottawa. Economists said starts would drop to 200,000, the median of 18 responses in a Bloomberg survey.

Canada's housing market, while slowing, has largely escaped the collapse in the U.S. For instance, Statistics Canada today said new-home prices unexpectedly rose 0.1 percent in September. Overbuilding remains a risk though and may lead to price declines next year, economists at Scotia Capital said.

``While price movements have been softening, our concern remains that builders could well be caught by surprise going into 2009 and forced to cut prices more aggressively,'' Derek Holt and Karen Cordes of Scotia Capital wrote today in a note to investors.

Sales through the Canadian Real Estate Association's Multiple Listing Service will decline 12 percent this year and 3 percent in 2009, the realtors' group said separately today in a statement. Average home prices will be unchanged this year before falling by more than 2.1 percent in 2009, CREA said.

To contact the reporters on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net.

Last Updated: November 10, 2008 14:02 EST