UPDATE 1-Toronto still hot as Canada new home prices rise in May

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* New housing prices up 0.3 pct on month, 2.4 pct on year

* Toronto-Oshawa up 0.5 pct on month, 5.5 pct on year

* Figures pre-date tightening in mortgage rules

* Concern expressed over possible housing bubble

OTTAWA, July 12 (Reuters) - Further strong increases in Toronto helped push up the prices of new homes in Canada by 0.3 percent in May, a month before the government announced it was tightening mortgage rules, according to Statistics Canada data released on Thursday.

The Toronto-Oshawa area posted a 0.5 percent increase on a monthly basis and 5.5 percent on the year. The annual increase for all of Canada was 2.4 percent, slightly down from 2.5 percent the month before.

Finance Minister Jim Flaherty announced stricter mortgage lending rules in June because of concern of a possible housing bubble, particularly in the condominium sector in Toronto, Canada's largest city -- in stark contrast to the weak U.S. market. Statistics Canada's figures however cover only single-family homes, not condominiums and multiple-unit apartments.

The Bank of Canada has highlighted the housing market and high household debt as the two biggest domestic risks to Canada's financial outlook.

A Royal LePage Real Estate survey this week said the Canadian market seemed to be at a tipping point, noting housing prices could not grow faster indefinitely than salaries and the underlying economy. (Reporting by Randall Palmer; Editing by Theodore d'Afflisio)