cap<\/a> on international study permit applications that will be approved over the next two years. The number of permits issued will be capped at 364,000 as of September 2024\u2014which is nearly half of the 684,000 permits issued in 2023.<\/p>\nHowever, the number of study permits issued in a year is only one factor that contributes to the number of international students who are physically living in Canada at any given time. Students that came in prior years, the share of permit applicants that go on to enroll, and expiring permits of graduating students are other crucial contributors.<\/p>\n
Assuming similar enrollment rates and outflow patterns as those observed in the three post-pandemic years, we estimate 391,000 new international students will enter Canada this year and 291,000 will graduate or otherwise see their study permits expire. This means the number of international students in Canada will continue to grow by 100,000\u2014about 55% less than the net increase in 2023.<\/p>\n
The impact on the rental housing market will run along the same lines. But even though we\u2019re expecting growth to moderate, this doesn\u2019t translate to an outright fall in rental demand\u2014at least not in the near-term. Given nearly all international students live in rented accommodation (we\u2019re assuming 97%), we estimate this slowdown could cut demand for new rentals by international students in half (relative to 2023).<\/p>\n
<\/p>\n
Rental demand for international students
\nexpected to moderate in 2024<\/p>\n
Number of international students in Canada (thousands of persons) and annual
\nchange in demand for rented accommodation for international students (%)<\/p>\n
![\"\"](\"https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2025\/03\/Proof-Point-Graphs-2.14-rental-demand_v2.jpg\")
<\/p>\n
Source: IRCC, RBC Economics<\/p>\n
International student cap will impact Ontario and BC most <\/h2>\n
Not all rental markets will be impacted equally. Given the federal government has allocated the national cap based on provincial population shares, the cap will be most constraining in Ontario and BC where international student admissions (53% and 19% of the Canadian total, respectively) outweigh their share of the Canadian population (39% and 14%). We see the number of international students in Ontario and BC remaining relatively flat in 2024, effectively stalling new rental demand by this group.<\/p>\n
The cap will be generally restrictive in Atlantic Canada as well, albeit to a lesser degree. We think it could lead to a 10% pullback in international student demand for rental housing in the region in 2024. The cap won\u2019t be much of a factor in Quebec and the Prairie Provinces, so we don\u2019t expect it to restrain rental demand in these parts of the country.<\/p>\n
<\/p>\n
International student cap will hit most provinces<\/p>\n
Annual change in study permits under international study cap (2024), %<\/p>\n
![\"\"](\"https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2025\/03\/Proof-Point-Graphs-2.14-student-cap-provinces_v2.jpg\")
<\/p>\n
Source: IRCC, RBC Economics<\/p>\n
Current cap could cut medium-term demand if maintained <\/h2>\n
We could see a decline in the number of international students in Canada by 2026 if the cap is maintained at the current level and extended beyond its set expiry in 2025. That\u2019s because the outflow of international students (which is a function of past international student arrivals) is set to rise substantially in the coming years. We see the outflow of international students picking up by next year\u2014potentially surpassing the number of new international student arrivals in 2026\u2014given enrollments jumped 7% in 2022 and an estimated 34% in 2023. <\/p>\n
If this materializes, an outright decline in the number of international students in Canada would relieve rental market pressures more meaningfully. In the meantime, post-secondary institutions and other stakeholders must find creative ways to grow the student housing stock amid challenges in quickly building new structures.<\/p>\n
<\/p>\n
International student cap will hit most provinces<\/p>\n
Annual change in study permits under international study cap (2024), %<\/p>\n
![\"\"](\"https:\/\/www.rbc.com\/en\/economics\/wp-content\/uploads\/sites\/23\/2025\/03\/Proof-Point-Graphs-2.14-iternational-students-number-could-drop_v2.jpg\")
<\/p>\n
Source: IRCC, RBC Economics<\/p>\n