Canadian Rent Prices Plunge to 20-Month Low as Visa Restrictions Trim International Student Numbers

Canada's median rental costs have fallen to their lowest point since last July, largely because of more stringent governmental regulations restricting the influx of international students.

According to data from Rentals.ca and Urbanation Inc., rental postings by landlords indicated a 4.8% decrease compared to the previous year, with the average rent dropping to CAD2,088 (US$1,458.50) last month. This is the lowest rental price recorded since July 2023 and signifies the most significant downturn since April 2021, amid the COVID-19 crisis.

Zumper, another rental website, also supported these observations, noting a yearly decline of 2.4% in rent prices for one-bedroom apartments, with an average cost of CAD1,850 in February.

Skyscrapers stretch across the horizon along Lake Ontario in Toronto, Ontario, Canada, captured on July 13, 2024. The photograph was taken by AFP.

Toronto and Vancouver, traditionally Canada's most expensive rental markets, continue to lead in rental costs. However, both cities have seen rents decrease due to a substantial influx of newly built condominiums, The Globe and Mail reported.

Rentals.ca reported studio apartment rents dropped by 5% in Vancouver and 6% in Toronto, with similar decreases recorded in larger units.

These decreasing rental prices are creating challenges for preconstruction buyers who are set to receive nearly 20,000 new condo units expected to be completed in 2025. These buyers are now facing high closing costs and rental rates that fall short of covering their mortgage payments.

The 2025 Housing Market Forecast from the Canada Mortgage and Housing Corporation indicates that the federal government’s long-term plan to provide financial incentives aimed at encouraging the construction of dedicated rental properties has resulted in an excess supply of rentals in some regions, exceeding demand for the first time in several decades.

In 2024, the national rental market experienced its most significant expansion in three decades, with a growth of 4.1%. Additionally, the national vacancy rate climbed to 2.2%, suggesting potential for continued rises ahead.

An additional contributing factor is the economic uncertainty arising from trade disputes alongside U.S. President Donald Trump.

As a result, the Canada Mortgage and Housing Corporation predicts rising vacancy rates in Canada's major urban centers over several years, potentially restraining rent growth.

Certain experts argue that the reduction of international students , which has been caused by the government’s visa limitations, has led to decreasing rental prices.

Last January, the government imposed a limit on the issuance of international student visas, expected to reduce the influx of foreign students coming to Canada by approximately 45%.

Even though it’s challenging to precisely gauge how much those policy shifts influenced the reduction in rental rates, their effect is probably significant, according to Mike Moffatt, who serves as a senior director of policy at the Smart Prosperity Institute. .

He mentioned that every summer, you added tens of thousands more temporary residents to certain communities that didn't have them the previous year, all while the available housing supply remained relatively stagnant.

The rents in college and university towns had become entirely disproportionate, which served as the justification for the federal government to implement these modifications.

In the previous year, approximately 280,000 study permits were granted, which represents the smallest number of approvals in a non-pandemic year since 2019—the period preceding the onset of COVID-19 outbreaks—according to a report from ApplyBoard, the leading global online service for recruiting international students.

Starting from late 2023, the government has implemented several more stringent regulations for international students with the aim of managing the effects of migration into Canada.

Last September, rental rates in Canada saw the smallest increase in almost three years, primarily due to a significant drop—about fifty percent—in foreign student enrollment numbers compared to their peak levels. This trend had the strongest effect in British Columbia and Ontario, according to Shaun Hildebrand, President of Urbanation, as mentioned in his report. Global News.