By Kim Mackrael

OTTAWA--Canadian new house prices rose again in March, as concerns mount over the country's hot housing market and the possibility that speculative activity may be helping to fuel the gains.

New house prices in Canada increased 1.1% in March, Statistics Canada said Thursday. In the previous month, new house prices rose 1.9%, or the largest monthly increase on record.

From a year ago, new house prices advanced 7.9%.

Some economists had predicted a decline in housing prices as a result of the economic restrictions that were first introduced last year to slow the spread of Covid-19. But Canada's housing market has defied those expectations and housing has been a source of strength through the economic recovery from the pandemic.

Last week, the Canadian Real Estate Association said sales of existing homes across Canada climbed 5.2% in March as activity hit its highest level of any month on record.

Some policy makers have expressed concern about the housing market's strength, and the Bank of Canada warned this week that speculative activity may be playing a growing role in rising prices.

Statistics Canada said 23 of the 27 metropolitan areas it tracks posted increases in new house prices in March.

Write to Kim Mackrael at kim.mackrael@wsj.com

(END) Dow Jones Newswires

04-22-21 0929ET