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* Markets had forecast a 1.0 percent increase in permits
* Housing sector continues to slow with 1.7 percent gain
* Non-residential permits jump 19 percent
OTTAWA, May 6 (Reuters) - The value of Canadian building permits surged past expectations in March to jump by 8.6 percent, primarily due to non-residential construction plans but also helped by a rebound in multi-family housing, Statistics Canada said on Monday.
Market players in a Reuters poll had forecast a 1 percent increase in building permits in the month. Statscan revised its February figure to a gain of 1.5 percent, from 1.7 percent.
Non-residential projects jumped substantially for the second month in a row, up 19 percent.
Permits for the closely-watched residential sector, which has been cooling since mid-2012, climbed 1.7 percent after an 8.1 percent drop in February, according to Statscan's revised figures.
Major condominium projects in the Western province of Alberta explained much of the 13.4 percent rise in permits for multi-family housing, which offset the 4.7 percent decrease in permits issued for single-family residences.
The values of permits in both residential and non-residential sectors were below their recent peaks.
In the non-residential sector, construction plans were strongest for institutional buildings such as government, medical or educational facilities, for which permits more than doubled in March. Industrial building permits also rose substantially while plans for commercial buildings declined.