Mortgage broker says situation is an opportunity for profession to show its worth
As international student numbers decline steadily, property investors in the GTA’s student hubs have been hit with a dive in rent revenue paired with increasing mortgage costs.
But mortgage brokers could provide resilience and expertise for the large number of property investors facing an increasingly uncertain market, according to Rajiv Verma, founder and principal broker at Brampton-based Simplify Mortgage Solutions.
Verma said that most investors in Brampton are small-time players who will not be able to withstand the market’s current challenges the same way a seasoned investor would. These investors may be tempted to offload their investment in this uncertain market, but Verma insisted property owners should not panic. Instead, he said they should seek the counsel of mortgage brokers who can help them assess their options.
“Basically, the reason they are having problems is they are thinking on their own. They should sit with the mortgage professionals and let them to work out the options. As a mortgage broker, we have access to banks, we have access to be a lender,” he said. “They should not be rate sensitive.”
In 2023, there were over one million international students in Canada, providing a seemingly ever-growing rental base for property investors in areas such as Brampton. But a series of Immigration, Refugees, and Citizenship Canada (IRCC) regulations introduced to limit study permits has led to a significant decrease of international applicants.
According to a Royal LePage survey released last week, 57% of Canadians renewing their mortgages expect their monthly costs to increase in 2025.
Many investors have been blindsided by the area’s decline in rental demands, said Verma. He added basement suite rentals that used to be snapped up at $2,200 [FM1] are now staying empty at $1,800[FM2] , indicating an acute dry up in demand.
“People purchased the houses because the rent was high, and they were factoring those rents into the mortgage affordability in Brampton,” he said. “Right now, the rent is … falling very sharply.”
Verma said that as the IRCC has tightened visa requirements, fewer international students are coming to the area, while graduated students are leaving in droves to find work that fulfills their permanent residency requirements.
“Fewer [students] are coming. But on top of that, the students who are here, they are also moving out of Brampton,” he said.
Not only have existing property owners been feeling the effects of declining rents, but the market shift has also created stumbling blocks for potential property investors in Brampton.
“The people that purchased, they are having issues right now. If somebody moved out, they cannot get that kind of rent when they purchased,” he said. “The impact will be on the existing investment properties, as well as the new investment properties who would like to purchase. They're going to feel the heat both ways.”
Looking ahead, Verma struggles to see how fortunes will change for the better, emphasizing the need for investors to consult a broker.
