Ontario Rental Market Sees a Shift as International Student Enrolment Declines

Ontario’s rental market is experiencing a slowdown, largely driven by a significant drop in international student enrolment. Though recent rent growth had been slower than expected, attributed by some to an increase in housing supply, the primary factor now appears to be a shift in demand.

This fall, enrolment of international students at Ontario’s postsecondary institutions has dropped by approximately 50% compared to last year. The 2024 cap on international student admissions, which cut new study visas by 35%, along with stricter visa application processes, has led to challenges for students attempting to renew visas. As a result, many international students were unable to secure entry or re-entry for the fall semester, causing a sharp decline in rental demand, particularly in cities with high student populations.

In Kingston, for example, rental inquiries have fallen significantly. "We would get 25 to 50 inquiries per week in August," said Amélie Brack, leasing manager for Limestone Property Management in Kingston. "This year, it’s been crickets.” The impact is clear in the numbers: in September, Kingston’s average rent for one-bedroom units dropped 1% from the previous month and 2.4% year-over-year, down to $1,795. Two-bedroom rents saw similar declines, dropping 3% month-over-month and 1.1% year-over-year to $2,185. Overall, average asking rents in Ontario fell by 4.3% compared to last year, reaching $2,380.

Looking forward, international student admissions are expected to decline another 10% in 2025, and the federal government’s targets for new permanent residents will also decrease each year, from 500,000 in 2024 to 365,000 by 2027.

While these shifts could make the rental market feel different to property managers accustomed to high demand, they also signal a return to pre-2020 norms. The new targets for student and immigration numbers are not unlike those from 2000-2021. Ontario’s property managers have successfully navigated these conditions before, and will likely continue to adapt to the evolving rental landscape.