The average rental apartment vacancy rate in 35 major Canadian cities increased slightly to 2.7 per cent in April from 2.6 per cent in April 2008, according to a survey by the Canada Mortgage and Housing Corporation.

The CMHC said the slight increase in the vacancy rate recorded in its spring rental market survey partly reflects a drop in demand for rental units.

"Completions of condominiums, which continue to attract renter households looking to move into homeownership, are decreasing demand for rental housing," Bob Dugan, chief economist at CMHC's market analysis centre, said in a news release.

"Also, some of the completed condos compete with rental units if they were purchased by investors who then rent them out. These two factors have put upward pressure on the vacancy rate. However, this has been balanced by higher levels of demand for rental housing."

The survey, released Wednesday, found that the major cities with the lowest vacancy rates in April 2009 were as follows: Quebec City, with 0.6 per cent; Regina, with 0.7 per cent; Winnipeg, with 0.9 per cent; and Saguenay, Que., and Trois Rivières, Que., both with rates of 1.1 per cent.

In B.C., only two cities had vacancy rates lower than 2.0 per cent: Victoria at 1.2 per cent and Vancouver at 1.9 per cent.

The survey found that the major cities with highest vacancy rates in April 2009 were Windsor, Ont., at 15.5 per cent, St. Catharines-Niagara in Ontario at 5.3 per cent and Abbotsford, B.C., at 4.8 per cent.

Vancouver leads in rental costs

According to the CMHC, the highest average monthly rents for two-bedroom apartments in new and existing structures were in Vancouver ($1,154), Calgary ($1,106), Toronto ($1,093), Edmonton ($1,059) and Victoria ($1,043). Of all cities surveyed, these five were the only ones with average rents at or above $1,000.

The CMHC said the lowest average monthly rents for two-bedroom apartments in new and existing structures were in Saguenay at $494 and Trois Rivières at $512.

The survey said year-over-year comparisons of rents can mislead consumers because rents in newly constructed buildings tend to be higher than those in existing buildings. If rents in new structures are excluded from comparisons, then a clearer picture emerges of actual rent increases paid by tenants.

It said the average rent for two-bedroom apartments in existing structures across the 35 cities in its survey rose 2.9 per cent between April 2008 and April 2009. Rent increases were largest in Saskatoon, at 15.5 per cent, and Regina, at 11.4 per cent.

The survey also found that the average rental apartment availability rate in Canada's 35 major cities was 5.0 per cent in April 2009, an increase from 4.9 per cent in April 2008. A rental unit is deemed available if the unit is vacant or if the existing tenant has given or received notice to move and a new tenant has not signed a lease.

Availability rates were highest in Windsor at 18 per cent, London at 7.9 per cent, St. Catharines-Niagara at 7.9 per cent, Guelph at 7.0 per cent and Sherbrooke at 7.0 per cent. The lowest availability rates were in Winnipeg at 1.4 per cent, Regina at 1.8 per cent and Victoria at 2.5 per cent.