Housing starts in Ontario were up last month compared to the month before – lead by gains in Hamilton and Kitchener, according to the Canada Mortgage and Housing Corporation.

There were 58,516 provincial housing starts in September, compared to 56,165 in August, the CMHC says. There was actually a decline in housing starts in Toronto – Ontario’s largest market – but Hamilton and Kitchener mostly picked up the slack, analysts say.

"Residential construction activity moved higher in September largely due to increasing activity in the multi-unit segment of the housing market,” said Ted Tsiakopoulos, CMHC's Ontario regional economist. “High density construction has been proliferating beyond traditional high density markets such as Toronto and Ottawa in the past year.”

There’s a demand for less expensive housing in the province, Tsiakopoulos says, driven by rising home prices and “modest growth” within the Ontario labour market.

“While conditions in the job market should improve, the shift to less expensive housing will gain momentum through 2015," he said.

Over a year’s worth of measurement ending in September, Ontario’s urban housing starts were two per cent below levels for the same period one year ago.