The average monthly rent for a two-bedroom apartment in Canada last month was $989, a rise of 2.7 per cent in the past 12 months.

The Canada Mortgage and Housing Corporation said in its annual report Tuesday that rents increased by twice the inflation rate this year, as booming demand for rental units pushed up prices, despite more of them being built.

Some of the highest rent increases were in British Columbia, where average rents in large urban centres such as Kelowna, Victoria and Vancouver increase by 8.6, 8.1 and 6.2 per cent, respectively.

Ontario rents also increased, mainly in and around the Toronto area.

Centres in Ontario with strong rent increases included Belleville (5.9 per cent), Oshawa (5.2 per cent), Hamilton (5.1 per cent), Barrie (4.6 per cent) and Toronto (4.2 per cent).

Rents in B.C. and Ontario increased mainly because the vacancy rate declined in each of them, allowing landlords to be choosier about tenants, and to charge more.

That's not the case in Canada's oil-producing provinces, however, where high vacancy rates continue to put downward pressure on rents.

In Saskatoon and Edmonton, the average rent on a two-bedroom apartment declined by 1.3 per cent this year. In Calgary, average rents decreased by one per cent.

In dollar terms across the country, Vancouver is the most expensive rental market in Canada, with the average price for a two-bedroom going for $1,552. Toronto is next highest at $1,404 and Calgary at $1,247.

Rents were lowest in Trois-Rivières ($594), Saguenay ($605) and Sherbrooke ($631), all in Quebec.