A new report from the Canadian Mortgage and Housing Corporation says Victoria has the lowest apartment vacancy rate of any major city in Canada.

The new report says the vacancy rate is 0.6 per cent — down from 1.8 per cent last year.

CMHC senior market analyst Eric Bond says the low vacancy rates are a product mostly of population growth.

"B.C. is set to lead other provinces in terms of economic growth and population growth this year and next, meaning the province will attract migrants from other provinces," he told All Points West host Robyn Burns.

"New residents to an area tend to rent for a period of time to get familiar with an area before home ownership."

And while demand is high, Bond says supply is increasing as well. He says there have been more construction starts on purpose-built rental units in 2015 than there have been "in at least the last 25 years."

"So really, we're starting to see builders respond to the higher demand for rental accommodation by starting new projects this year," he said.

Bond believes that the increased housing starts will increase the vacancy rate to about 1 per cent this time next year.

To hear the full story, click the audio labelled: Apartment hunters, beware: Victoria vacancy rates lowest in Canada