* Drop in permit value follows two consecutive increases
* Residential sector permits drop by 2.8 percent
* Non-residential sector falls by 8.4 percent
OTTAWA, June 5 (Reuters) - - The value of building permits issued in Canada dropped by 5.2 percent in April from March, pulled down by weaker construction intentions in the powerful province of Ontario, Statistics Canada said on Tuesday.
The drop - much greater than the 1.9 percent retreat predicted by market analysts - follows two consecutive month-on-month increases.
The decline might also provide some small relief for Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney, who worry the booming Canadian property market could become overheated.
The bank is widely expected to announce at 9 a.m. (1300 GMT) on Tuesday that it is keeping its key interest rate at a near record low. Flaherty and Carney also fret that when rates start to rise, it could hurt Canadians who borrowed too heavily.
The residential sector dropped by 2.8 percent to C$3.80 billion ($3.65 billion), the fourth consecutive monthly decrease, pulled down by lower construction intentions for multi-family dwellings in Ontario and single-family dwellings in the western province of Alberta.
The value of permits in the non-residential sector dropped by 8.4 percent to C$2.69 billion, largely due to a 35.4 percent decline in Ontario, where construction intentions for government buildings and medical facilities were lower.
The overall value of permits issued in April 2012 was 24.3 percent higher than in April 2011.
$1=$1.04 Canadian Reporting by David Ljunggren; Editing by Chizu Nomiyama