As COVID-19 restrictions start to ease and more students return to in-person learning in the Fall, we expect to see an increase in demand in the housing market very soon. Many Ontario university and college students have been studying remotely for the last 15 months since the pandemic began. Subsequently, there has been a shift in the rental market as students no longer needed to live near campus. Now, as we start to move into the colder months, we can expect that both local and international students will resume in-person learning. Plus, as the border slowly opens back up for fully-vaccinated foreign nationals, many international students are ready to return to school in Ontario.
To come into Canada, international students must follow two requirements listed on the Government of Canada website. They will need a valid study permit or letter of introduction that shows that they were approved for a study permit and must be enrolled in a designated learning institution (DLI) with a COVID-19 readiness plan approved by their province or territory. Canada expects to bring in more than 300,000 international students by the beginning of the school year. This shift means that as more students return to school, they will need a place to live.
In a new analysis by Senior Director and Assistant Professor for Ivey Business School, Dr. Mike Moffat, the spike in the province’s non-permanent residents is predominantly caused by the rise in the number of international students. If we look at data leading up to the pandemic, there has been a huge spike in foreign nationals coming to Canada with a study permit which means they are coming as international students. The number of study permit holders in Toronto and the GTA increased from 142,475 in 2015 to 235,135 in 2018, a 102,660 change in just three years. As Dr. Moffat notes in his analysis, it’s important to keep in mind that a study permit does not mean active enrollments as students may have left early or never started their programs, so this data may not be 100 per cent accurate. Still, it is a good indicator of how many study permits are issued per year and how many students we can expect to see now that in-person learning resumes.
Although immigration is often a debated topic, it is necessary to have people coming into the country to live as it helps our economic growth. So far this year, the Government of Canada has issued 44 per cent more study permits than last year. In fact, in the first quarter of 2021, our population grew at the fastest rate since the beginning of the pandemic, and this is credited to immigration rates.
As these students return, we will see an increased demand for housing, especially condominiums because many students prefer to rent one-bedroom condos over low-rise homes. This means that investors should be looking for pre-construction opportunities near colleges and universities that do not necessarily have to be in major cities like Toronto. There are many cities across Ontario that have top rated schools for growth, including the University of Toronto including St. George, Mississauga and Scarborough Campus; Centennial College, Conestoga College in Kitchener, Fanshawe College in London, York University and Seneca at York. No matter where you look around the GTA, you will never make a bad investment decision by investing near post-secondary institutions.
The demand for student housing is strikingly high, mainly because there is not enough supply for the influx of immigration coming into the province. Therefore, investors should be looking to buy their next pre-construction condo near a post secondary school or near a transit line that will take students to their school. This way, they can guarantee that student tenants will be flocking to their place of residence to live while they study. The market is hot, and as the demand is high and supply is low, now is the perfect time to buy as investors will make a substantial return on their investment in the future.