Months after the federal government clamped down on international student visas, the asking price for rental units in Canada has stabilized and in some cities is now falling, bringing relief after years of surging rents.
In August the average rental rate landlords in Canada were asking was 0.7 per cent lower than three months earlier, according to real estate research firm Urbanation. That reversed a trend that saw asking rents spike each summer over the past three years as large numbers of international students sought accommodation ahead of the new school year.
The average monthly asking rent on Rentals.ca in Canada was $2,187 in August. That was up 3.3 per cent from the same month last year, but has flatlined since January.
That month the federal government capped the number of international student visas it issues, with the move expected to reduce Canada’s foreign student intake by 35 per cent this year compared with last year. However by some estimates, international study permits could be on track to drop by almost half this year.
While it’s impossible to say exactly how much of the asking rent slowdown is owing to those policy changes, it is likely significant, said Mike Moffatt, a senior director of policy at the Smart Prosperity Institute.
“Every summer you were adding tens of thousands of extra renters to some communities who weren’t there the year before, coupled with supply that wasn’t increasing much,” he said. “Rents in college and university towns had gotten completely out of whack and that was the rationale for the federal government to make these changes.”
In some cities, asking rents are now falling, with Vancouver seeing an annual decline of 6.4 per cent and Toronto a drop of 7.5 per cent, while Kitchener, Ont., Barrie, Ont., Hamilton and Calgary were among other cities where asking rents are falling.
Because asking rents only reflect new leases, Mr. Moffatt said existing tenants won’t see immediate relief, but should benefit over time. “This will operate with a lag but it should help by putting downward pressure on shelter costs,” he said.
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