Recent announcements regarding a cap on new study permits in Canada are expected to impact the rental housing market for international students, according to a report by the Royal Bank of Canada (RBC). The cap, introduced by Immigration Minister Marc Miller, aims to address the significant growth in international student enrollments at Canadian post-secondary institutions.
While the cap signifies a substantial decrease in the number of new study permits issued this year, economists at RBC predict that it won't immediately translate into a decline in the total number of international students in the country. Consequently, the demand for rental units by international students is not anticipated to experience a sharp downturn this year.
The cap, set at 364,000 for this year, marks a 35 per cent decrease from the nearly 560,000 permits issued in the previous year. However, RBC economist Rachel Battaglia, the author of the report, suggests that the impact of the cap on rental markets may be more pronounced in provinces like Ontario and British Columbia, where international student admissions surpass their population share.
The report highlights that if the cap extends beyond 2025, it could lead to a decline in the number of international students in the country, potentially alleviating pressure on the rental market. Nonetheless, it underscores the importance of stakeholders in the post-secondary education sector finding innovative solutions to expand student housing amidst challenges in swiftly constructing new facilities.
The Canadian government's immigration policies, including those related to international student programs, have faced increased scrutiny amid the country's rapid population growth. This growth, fueled by both permanent and non-permanent immigration, has exacerbated pressures on the housing market, leading to soaring rent prices and historically low vacancy rates.
In response, the government has implemented measures to boost housing supply, such as exempting GST charges on new rental developments and offering low-interest loans to post-secondary institutions for student housing projects starting this fall. As the nation navigates these challenges, stakeholders continue to explore strategies to ensure housing availability meets the evolving needs of international students and local communities alike.
