Open this photo in gallery Houses under construction in Toronto on June 26, 2015. GRAEME ROY/The Canadian Press

The pace of housing starts slowed in March as the rate of new work on buildings such as apartments, townhouses and condominiums decreased, Canada Mortgage and Housing Corp. said Tuesday.

The agency said the seasonally adjusted annual rate slowed to 225,213 units in March compared with 231,026 in February.

The decrease came as the pace of multiple urban starts, which includes apartments, townhouses and condominiums, fell 7.3 per cent to 144,578 units in March.

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That drop was offset in part by a 9.5-per-cent increase in single-detached urban starts to 63,659. Meanwhile, rural starts were estimated at a seasonally adjusted annual rate of 16,976 units.

The six-month moving average of the monthly seasonally adjusted annual rates edged up to 226,842 units in March compared with 225,804 in February.

The housing sector is being watched as it adjusts to higher mortgage rates, new mortgage-lending rules that were brought into force at the start of the year and other changes.

Canadian home sales sank in February, while the national average home price also slumped compared with a year ago, according to figures compiled by the Canadian Real Estate Association.

Home sales figures for March are expected on Friday.

TD Bank economist Rishi Sondhi noted that housing starts in the first quarter averaged 227,000, about in line with their fourth quarter level.

“While new housing construction is holding up, a plunge in home sales suggests that residential investment will subtract notably from Q1 growth,” Mr. Sondhi wrote in a report. “Going forward, starts will likely ease from their solid Q1 pace, in light of rising interest rates, regulation, and a softer price environment.”

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In a separate release on Tuesday, Statistics Canada said municipalities issued $8.2-billion in building permits in February, down 2.6 per cent compared with January.

The decrease, which suggests a decline in builder intentions, came as the total value of residential building permits dropped 0.3 per cent to nearly $5.3-billion.

The value of permits for single-family dwellings fell 1.6 per cent to $2.6 billion, while permits for multifamily dwellings increased 1 per cent to nearly $2.7-billion.

The value of non-residential permits issued fell 6.6 per cent to nearly $2.9-billion.