Here's how Canada's new foreign student visa cap could affect rents
CTV
Canada's new limit on visas for international students will cool the high demand for rental units and slow the rate of rent hikes, but it won't necessarily be a big factor in solving the country's housing affordability crisis, observers say.
Canada's new limit on visas for international students will cool the high demand for rental units and slow the rate of rent hikes, but it won't necessarily be a big factor in solving the country's housing affordability crisis, observers say.
"I think what we'll see is the impact will be somewhat slow and muted," said Steve Pomeroy, industry professor at McMaster University's Canadian Housing Evidence Collaborative research network, in a phone interview with CTVNews.ca. Pomeroy is also a senior research fellow at Carleton University's Centre for Urban Research and Education.
"Capping students and better managing demand will help to slow the rate of rent increases," he added in an email. "It will not necessarily reduce rents or make them more affordable."
In order to see lower rents, Pomeroy said, demand has to be reduced and supply expanded to push rental vacancy rates well above three per cent. The country's overall rental vacancy rate hit a new 36-year low of 1.5 per cent in 2023, according to a Canada Mortgage and Housing Corp. report released Wednesday.
The cap will primarily affect the rental market since international students and temporary foreign workers tend to rent rather than own homes, he said.
"They're (the federal government) very late to the game, but they are at least now acting in the right way," Pomeroy added, referring to the government's recent measure to curb the surge in foreign students. "I think it's a positive move for the rental market ... because basically, it's reducing future demand, which in turn, will take the pressure off rents, and therefore we won't see the very, very large rent increases."
Immigration Minister Marc Miller announced on Jan. 22 a temporary two-year limit on foreign student enrolment that would cut the number of new permits by 35 per cent this year. The move means Canada will have a cap of 364,000 new three-year permits this year.
