Canada January new house prices post biggest rise in 20 months

* Monthly new house price rise the biggest since May 2012

* Annual increase breaks 5-month spell of slowing growth

OTTAWA, March 13 (Reuters) - Canadian housing prices rose by 0.3 percent in January, the biggest jump for 20 months, on strong gains in the western Prairie region, Statistics Canada said on Thursday.

The increase - greater than the 0.1 percent advance forecast by market analysts - was the largest since the 0.3 percent gain seen in May 2012.

Prices in the metropolitan region of Calgary, the capital of Canada's oil industry, jumped by 1.3 percent from December on higher material and labor costs as well as market conditions.

Elsewhere in the West, prices in Saskatoon rose by 1.4 percent while those in Winnipeg climbed by 0.5 percent.

The Canadian government, which has intervened in the mortgage market four times since 2008 to cool the sector, has long expressed concerns the housing market might overheat though it thinks a soft landing is more likely.

The new housing price index excludes condominiums, which the government says are a particular cause for concern.

The closely watched Toronto-Oshawa region, which accounts for 28.01 percent of the entire market, posted a 0.2 percent increase from December.

Overall, prices were up in five of the 21 metropolitan regions, down in nine and unchanged in seven. Prices rose 1.5 percent from January 2013, breaking a five-month spell of slowing year-on-year growth.

Canada's national housing agency announced last month it would increase its mortgage loan insurance premiums from May 1 to shore up its capital and reduce taxpayers' exposure to the housing market.