With no rent controls, a 1 per cent vacancy rate and rising rents, Saskatchewan's capital is emerging as a dream market for multi-family investors. A two-bedroom apartment in Regina now rents for $881 per month, a record high, and up from $832 a year ago, according to survey by B.R. Gaffney and Associates Ltd.

The average price-per-suite for a Regina apartment building ranges from $75,000 to $90,000, though prices are as low as $42,000 per door in less desirable neighbourhoods, B.R. Gafney found. Typical capitalization rates are around 5 per cent. 

The low vacancy rate - tied as the lowest in Canada - has convinced the City of Regina to freeze conversions of rental apartments to condominiums in an attempt to preserve the rental stock. The rental demand is being fueled by Saskatchewan's low unemployment rate of 4.9 per cent, the lowest in Canada, and the fastest population growth in decades. Last year 50,000 people moved into the province, pushing the population to more than one million. 

The rental market is also strong in other Saskatchewan cities. Estevan, close to the oil fields, has seen its vacancy rate plunge to 1.5 per cent, while Moose Jaw's average rents have risen 14 per cent in the past year as the vacancy rate fell to 1.4 per cent. Saskatoon, the largest city in the province, has a 2.6 per cent vacancy rate and high demand for apartment buildings.

Low mortgage interest rates, available to investors through Canada Mortgage and Housing Corp. insurance coverage and the high level of net in-migration make Saskatchewan's multi-family rental market "a prime investment in 2011," according to Avison Young, Regina.