Temporary cap on new permits a big factor
The temporary cap on new study permits in Canada is unlikely to see an outright decrease in rental housing demand from international students this year, according to a new Royal Bank of Canada (RBC) report.
Still, the banking giant says the policy could see the expected increase in those students’ rental demand drop by around 50%.
Immigration minister Marc Miller recently announced the implementation of a temporary cap on new study permits over the next two years, marking the federal government’s attempt to handle the growing number of international students enrolling in Canadian post-secondary institutions.
From the previous 560,000 issued visas last year, the cap for new visas in 2024 will be 364,000, representing a 35% decrease, which is set to cause a cut in the rental demand from international students.
However, RBC Economist Rachel Battaglia said the decrease in international study permits will not lead to an immediate drop in the total number of international students in the country. This meant there will likely not be an outright decline in the rental unit demand among international students this year.
The government has been planning to allocate student permits to provinces depending on the proportion to population share.
According to the report by RBC, the cap will likely have a bigger effect on the rental markets in Ontario and British Columbia because of the provinces’ number of international student admissions, as those outweighed their share of the population.
Should the cap for the year extend beyond 2025, the bank said it would cause a decline in the number of international students within the country and consequently relieve pressures on the rental market.
“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,” the report stated.
