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(Adds regional data, economist comment)
By Andrea Hopkins
TORONTO, April 10 (Reuters) - Canadian housing starts rose much more sharply than expected in March as groundbreaking on new condominiums and apartments in urban areas surged 48.2 percent, while February numbers were revised slightly lower, data showed on Friday.
The report from the Canadian Mortgage and Housing Corp showed the seasonally adjusted annualized rate of housing starts rose to 189,708 units last month from a downwardly revised 151,238 units in February. This exceeded the 175,000 that economists had expected.
CMHC and private-sector economists both pointed to the six-month average as a better gauge of new home construction given the recent volatility in the data.
"Note that these numbers represent very small levels of not-seasonally-adjusted activity as very little actual construction happens in Canada during the frozen winter months," Scotiabank economist Derek Holt said in a research note.
The six-month trend of housing starts showed 179,016 units in March compared to 180,236 in February, essentially unchanged.
Canada escaped the U.S. housing market crash and the housing market has climbed unsteadily higher since 2009, driving prices to record highs, particularly in Toronto and Vancouver.
Economists are divided over whether the boom, which is showing signs of slowing, will end in a U.S.-style crash or a soft-landing. Housing construction is forecast to weaken in the months to come, particularly in the resource-dependent province of Alberta, where a drop in oil prices is hurting the economy.
But continued low interest rates have bolstered demand for homes even as the economy has struggled to gain momentum.
"While we are bracing for more regional weakness in housing, lower interest rates are expected to provide a potent offset," David Tulk, chief Canada macro strategist at TD Securities, said in a research note.
Urban starts led the March increase, up 28.1 percent. Construction of multiple-family units - typically condos - rose 48.2 percent to 125,263 units, while single-detached urban starts decreased 3.4 percent to 52,196 units.
Starts increased in Ontario, British Columbia, Quebec and the Prairies, while decreasing in Atlantic Canada, CMHC said. (Reporting by Jeffrey Hodgson Editing by W Simon)