International student cap won't lower rental demand in near-term: economist

Canada’s two-year cap on international student admissions will not lower demand for rental units in the near term, says one economist.

Rachel Battaglia, an economist at the Royal Bank of Canada, said in a report Wednesday that the federal government’s cap on international study permit applications will not “immediately reduce rental demand” from international students this year. However, Battaglia said the cap is likely to dramatically slow demand growth this year. 

“We estimate the increase in rental units demanded by international students could fall by roughly half in 2024,” Battaglia said. 

“The number of international students living in Canada—and rental units they need—would eventually decline if the cap is maintained at the current level and beyond its expiry in 2025.”