Canada is grappling with a persistent housing crisis, marked by a 6% increase in the average selling price within six months, reaching CA$668,754. Additionally, the average rental price for a one-bedroom apartment has surged to CA$2,078.
Policymakers are now scrutinizing the role of international students in driving these soaring housing costs. This report delves into the connection between the influx of international students and the housing market in Canada.
Background to the Story
International Student Influx: In the previous year, Canada witnessed an impressive influx of over 800,000 international students, a significant number for a country with a population of approximately 40 million.
More than half of these students chose Ontario as their destination. Notably, in 2022, nearly 1 in 48 individuals in Canada held an international student study permit.
Economic Contribution: International students play a crucial role in university budgets and contribute significantly to Canada’s economy, estimated at around CA$18 billion in 2018.
With capped tuition rates for domestic students and limited government funding, educational institutions increasingly rely on foreign students to bridge the financial gap.
These students are also permitted to work during their time in Canada, further bolstering the economy. A substantial portion of international students eventually become permanent residents, with approximately 30% achieving this status within 15 years.
Notable Comment
Commenting on the situation, Housing Minister Sean Fraser stated, “We must strike a balance between our commitment to education and the pressing housing crisis. While international students enrich our universities and boost our economy, we also need to address the housing affordability challenges faced by Canadians.”
Latest Developments
Consideration of Student Cap: Housing Minister Sean Fraser is currently contemplating the implementation of a cap on the number of international students welcomed to Canada.
The goal is to alleviate the pressure on housing prices, especially in high-demand regions. This consideration arises as Canada has recently raised its immigration target, aiming for 500,000 admissions in 2025.
Housing Shortage: Canada is facing a severe shortage of housing units to meet the growing demand, including purpose-built rentals and non-market options.
According to the Canada Mortgage Housing Corporation, the country needs to construct over 800,000 housing units annually.
However, in 2022, only 260,000 units were built. On-campus housing options are also insufficient, lagging behind the increasing demand.
Predictions to the Trend
In the upcoming months, as students prepare to commence their studies in September and application deadlines for the next academic year approach in February and March, there will a lot more reactions from the government.
Close attention will be paid to how the government manages the complex challenge of funding universities, accommodating newcomers, boosting GDP, and providing housing for students and the broader population.
Finding a delicate balance between these competing needs will be pivotal in addressing Canada’s housing crisis while nurturing its educational and economic growth.
