Canadians have had to search a little harder over the past year for rental housing because of a tighter market, according to a survey by the Canada Mortgage and Housing Corp.

The average rental apartment vacancy rate in 28 major cities dipped by 0.1 of a percentage point to 2.6 per cent in October compared to the same month last year, the CMHC said in its Rental Market Survey released Thursday.

"Solid job creation and healthy income gains helped strengthen demand for both ownership and rental housing," said CMHC chief economist Bob Dugan in a release.

"High levels of immigration were a key driver of rental demand in 2006, as was the increasing gap between the cost of home ownership and renting. These factors have put downward pressure on vacancy rates over the past year."

Windsor had the highest vacancy rate in 2006 at 10.4 per cent, followed by Saint John at 6.8 per cent and St. John's at 5.1 per cent. At the other end of the spectrum, Calgary had the fewest apartments available for rent with a 0.5 per cent vacancy rate. Victoria and Vancouver followed at 0.5 per cent and 0.7 per cent, respectively.

Torontonians paid the highest rents, averaging $1,067 for a two-bedroom apartment. Renters in Vancouver paid $1,045, followed by Calgary at $960 and Ottawa at $941.

Vacancy rates fell in four of the Prairies' five major cities, with Edmonton experiencing the most significant drop — 3.3 percentage points — to 1.2 per cent over the past year. The market also tightened in Saskatoon to 3.2 per cent. The CMHC attributed the fall in those cities to large numbers of people moving to the region and an increase in mortgage carrying costs.

Quebecers enjoyed a softer market with rates falling in three of six major cities and remaining unchanged in one.

"Low mortgage carrying costs continued to draw renter households toward home ownership," the report said. "This, combined with weak job opportunities for youths, held back growth in rental demand."

The study noted that while vacancy rates have fallen, increased levels of home sales combined with the high number of housing starts in 2006 have created considerable competition for the rental market.