Foreign students get caught up in Canada’s housing crisis
As Canada’s housing crisis continues – with the average selling price up 6% in six months, to CA$668,754, and the average 1 bedroom rental price at CA$2,078 – policymakers are looking at the effect of international students on prices. Last year, Canada saw over 800,000 international students arrive in a country of roughly 40 million people, over half of whom ended up in Ontario. In 2022, nearly 1 in 48 people in Canada were international students on a study permit.
International students are critical to university budgets and major contributors to the economy, at somewhere near CA$18 billion in 2018. With tuition caps on domestic rates and insufficient government funding, schools turn to foreign students to make up the difference. Those same students are also permitted to work while in Canada, and do. International students often become permanent residents, with roughly 30% of them doing so within 15 years.
But Housing Minister Sean Fraser is now considering a cap on the number of international students welcomed to the country in order to take pressure off housing prices. This comes as Canada recently revised its immigration target upwards, aiming for 500,000 admissions in 2025.
Canada isn’t building enough housing to keep up with demand, including purpose-built rentals and non-market options. The Canada Mortgage Housing Corporation says the country must build over 800,000 units a year. In 2022, it built 260,000. On-campus housing options are also inadequate, lagging behind growing demand.
In the coming months, with students set to start school in September and applications for next year due in February and March, we’ll be watching to see how the government manages competing needs to fund universities, welcome newcomers, juice GDP, and house students – and everyone else.