UPDATE 3-Canada data offers more proof of housing strength
* December house starts stronger than expected
* Housing permits rise for ninth straight month
* Bank of Canada: premature to talk about bubble (Writes through with details from Bank of Canada, Scotiabank outlook)
By Ka Yan Ng
TORONTO, Jan 11 (Reuters) - The Canadian housing sector served up more evidence on Monday that it is leading the country's economic recovery, while the Bank of Canada said it was premature to talk about a housing bubble.
Fresh data showed new home construction rose for a third straight month in December, according to Canada Mortgage and Housing Corp. Statistics Canada said residential construction permits jumped in November and "have started to approach their pre-downturn levels." Statscan said.
"A fairly clear trend towards recovery has established itself in the residential category, whether one is looking at the permits numbers or actual unit starts," said Stewart Hall, an economist at HSBC Securities Canada.
Housing starts rose 5.9 percent to a seasonally adjusted rate of 174,500 units in December from an upwardly revised 164,800 units in November, CMHC said, easily exceeding economists' average forecast of 160,000.
The value of Canadian building permits issued fell 4.6 percent in November from October, roughly in line with forecasts, but housing permits were up 9.1 percent, Statscan said, the ninth consecutive month of gains. [ID:nN11413438 Continued...