Canadian residential construction dipped in March with  Toronto Condominiums moderating the overall housing starts.

Urban multiple-dwelling starts decreased by 15.2 per cent in March to 77,500 units but single urban starts increased 6.9 per cent to 97,700 units.

According to the Bank of Montreal the first quarter of 2010 recorded housing starts increasing 8.2 per cent.

The two prior quarters registered 15.2 per cent and 22.1 per cent showing a slowing down of the new housing market.

Ontario saw new home starts increase by 18 per cent over the same time last year and Vancouver new home construction was up 76 per cent in the first quarter.

British Columbia, Alberta and Ontario continue to drive the housing recovery because they were the hardest hot by the recent recession.

Analysts predict a lower level of housing activity in the last half of this year due to stricter mortgage rules, rising interest rates and the new HST tax.

The Bank of Montreal predicts as housing becomes less affordable in Toronto, demand will shift towards Condominiums and construction will favour high rise projects again.