* Reports point to a gradual recovery unfolding

* Housing permits back to pre-recession levels

* Ivey upbeat but analysts say reality is starker

* High jobless numbers expected to linger

By Louise Egan

OTTAWA, Nov 5 (Reuters) - Canada's economic recovery is unfolding slowly but surely, new data showed on Thursday, and the housing market in particular appears headed back to growth levels not seen since before the recession started.

Permits for housing construction in Canada surged 9.4 percent to their highest since September 2008, offsetting a decline in nonresidential permits to drive up overall building permits in the month by 1.6 percent, Statistics Canada said. For details, see [ID:nN05106233].

The upbeat report came as the federal government housing agency, CMHC, forecast a 26 percent rise in housing starts next year in Toronto, Canada's most populous city. Existing home sales, however, are expected to dip. [ID:nN05107068]

Housing has been a rare bright spot in the Canadian economy, helped by record low interest rates and a pledge by the Bank of Canada to keep its benchmark rate at rock-bottom until mid-2010.