Canadian housing starts rose more than expected in February after falling to their lowest since the end of the 2009 recession.
The annual pace of work increased to 180,719 units from a revised 158,998 in January, Canada Mortgage and Housing Corporation said.
Economists forecast a reading of 175,000, according to the median of 20 responses to a Bloomberg News survey.
The country's housing market is cooling after policymakers took measures to curb mortgage lending last year amid concern that a bubble was building in some markets.
Finance Minister Jim Flaherty tightened rules on government-insured mortgages in July for the fourth time in four years, while the Office of the Superintendent of Financial Institutions, the country's banking regulator, introduced tougher standards for mortgage lenders.
The February figures suggest the large drop in January was "just winter-time noise", Emanuella Enenajor, an economist at CIBC World Markets in Toronto, said in a note to investors.
"Nonetheless, the broader trend of residential construction is still tracking well below levels seen just a few months ago," Enenajor wrote.
Multiple-unit starts in urban areas rose 28 per cent to 99,022 in February from 77,520 in January.
"While new home construction in 2013 is expected to be lower than last year, strong employment growth and heightened migration should continue supporting housing demand," said Goodson Mwale of CMHC.