Key Takeaways:
- Canada’s student visa cap may reduce international student rental demand, impacting the housing market significantly.
- Provincial variances in rental demand due to the cap will be felt unequally, with Ontario and B.C. affected the most.
- Long-term effects could lead to a decline in international student numbers, prompting the need for innovative housing solutions.
Canada’s Student Visa Cap Expected to Affect Rental Market Growth
In recent news, Canada has introduced a new measure that will likely impact the rental market significantly. According to Rachel Battaglia, an economist at Royal Bank of Canada, the country’s largest lender, the student visa cap introduced by the federal government is projected to decrease the growth of demand for rental units among international students.
Understanding the Student Visa Cap
For 2024, the Canadian government has imposed a cap on international study permits, setting a limit at approximately 360,000. This represents a substantial decrease of 35% from the previous year. As of 2025, this limit is set to be reassessed later in the year. This cap is part of a broader government strategy to mitigate public frustrations over housing shortages, which have been exacerbated by the influx of foreign students and temporary workers.
Impact on Rental Demand
This new policy is expected to halve the increase in demand for rentals from international students this year compared to 2023. With the vast majority of foreign students in Canada choosing to rent their homes, the effect on the housing market is unmistakable. Battaglia’s analysis suggests that if enrollment rates and outflow patterns remain similar to those after the pandemic, the number of international students in Canada could grow by only 100,000 in 2024, “or 55% less than the net increase last year.”
This could have far-reaching consequences for the Canadian rental market, which experienced its lowest vacancy rates and highest rent increases on record in 2023, as shown by data from the Canada Mortgage & Housing Corp.
Regional Variances
The national cap’s effect won’t be uniform across Canada. It will be distributed among the provinces based on their population shares, with Ontario and British Columbia expected to feel the tightest squeeze. Ontario, which accounts for 53% of Canada’s total international student admissions but only has a 39% share of the national population, alongside British Columbia—holding a 19% share of international students against its 14% population share—will likely see the number of foreign students remain stable in 2024. This stability in student numbers could lead to a stalling of new rental demand in these regions.
In contrast, regions like Quebec and the Prairie provinces are not expected to experience a significant restraint in rental demand due to the visa cap. Atlantic Canada, on the other hand, might see a 10% reduction in foreign student demand for rental housing this year according to the RBC economist.
Long-Term Outlook
Looking beyond 2025, if the study permit cap remains unchanged, Canada could potentially experience a decrease in the number of international students by 2026, provided outflows exceed new arrivals. “If this materializes, an outright decline in the number of international students in Canada would relieve rental market pressures more meaningfully,” Battaglia stated.
It is clear that educational institutions and other related stakeholders must now focus on innovative solutions for expanding student housing. “In the meantime, post-secondary institutions and other stakeholders must find creative ways to grow the student housing stock amid challenges in quickly building new structures,” Battaglia remarked, highlighting the urgency of the situation.
This policy shift marks a significant moment for Canada’s approach to managing international education and its knock-on effect on the housing market. International students intending to study in Canada should remain informed about changes to study permit requirements and should consult official resources such as Immigration, Refugees and Citizenship Canada (IRCC) for accurate and updated information.
As Canada navigates these changes, both international students and the rental market stakeholders will need to adapt to a new landscape that calls for insight, planning, and collaboration to address the evolving dynamics created by the student visa cap.
Learn Today:
Glossary of Immigration Terminology
1. Student Visa Cap: A limit set by a country’s government on the number of study permits granted to international students. The cap can affect the influx of foreign students and has implications for the rental housing market.
2. Study Permit: A document issued by a country’s government that allows foreign nationals to study at designated educational institutions in that country for a specific period of time.
3. International Student: A person who is studying in a country other than their own, usually on a student visa or study permit.
4. Rental Market: The market where landlords offer properties for rent, and tenants pay rent to use those properties. It includes residential, commercial, and other types of rental properties.
5. Housing Shortages: An insufficient supply of housing relative to the demand, leading to challenges such as high rent prices, low vacancy rates, and limited housing options.
6. Vacancy Rates: The percentage of available rental properties that are unoccupied at a given time. Low vacancy rates indicate high demand and may lead to increased rent prices.
7. Canada Mortgage & Housing Corp (CMHC): A government-owned corporation in Canada that provides mortgage insurance, market analysis, and research on the housing market.
8. Provincial Share: The distribution of resources, responsibilities, or policies among the provinces or regions within a country based on factors such as population size, economic activity, or specific needs.
9. Outflows and Inflows: The movement of people, in this context international students, out of or into a country. Outflows refer to students leaving the country, while inflows indicate students entering the country for study purposes.
10. Post-Secondary Institutions: Educational institutions that provide education beyond the high school level, such as colleges and universities.
11. Immigration, Refugees and Citizenship Canada (IRCC): The Canadian government department responsible for immigration, refugees, and citizenship matters. It oversees the issuance of study permits, visas, and other immigration-related processes.
12. Rental Demand: The desire or need for rental housing accommodations by individuals, including international students, in a specific geographical area. Changes in demand can impact rental prices and availability.
Exciting developments in Canada’s student visa policies are reshaping the rental market. As demand shifts, exploring insightful resources like visaverge.com can keep you in the know. Stay informed as Canada and its international students navigate these evolving dynamics together!
This Article In A Nutshell:
Amid a new student visa cap in Canada, the rental market’s growth is set to slow. Projections show a potential 55% drop in international student increases. Regional variations in impact are expected, influencing rental demands. Adapting to this shift, stakeholders must innovate to address housing challenges, presenting a new frontier for collaboration.
