Nov. 9 (Bloomberg) -- Canadian housing starts rose to the highest this year in October, on construction of multiple-unit residences, Canada Mortgage and Housing Corp. said.

Starts rose to a seasonally adjusted annual pace of 157,300 units from a revised 149,300 units in September, or by 5.4 percent. Economists anticipated the October pace of starts would be 158,500 units, according to the median of 21 responses in a Bloomberg survey.

Multiple-unit work in cities advanced 14 percent to 72,600 units, CMHC said today from Ottawa. Urban singles fell 2.7 percent to 67,300 units.

Work on new homes may increase in the months ahead with mortgage rates pushed lower by government purchases of loan portfolios from commercial banks and a 0.25 percent benchmark interest rate from the Bank of Canada. Building permits rose 1.6 percent in September, Statistics Canada said last week, with single-family home starts returning to a level reached before the recession started last year.

“Starts continue to be on a gradual uptrend, which we expect to continue into 2010,” Avery Shenfeld, chief economist at CIBC World Markets in Toronto, wrote in a note to clients. “But we are still a mile away from the boom levels above 200,000 starts that prevailed prior to the recession.”

CMHC last week also raised its 2010 forecast for new home starts to 164,900 on strengthening demand, from a September prediction of 150,300 homes.

To contact the reporter on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net.

Last Updated: November 9, 2009 09:04 EST