Small Landlords Face Uncertain Future Amid Drop in Foreign Student Demand
Issmat Al-Akhali had plans to expand his Halifax student residence business to other locations in Canada given that his Granville Hall residence had a wait list teeming with students.
He was on track to add another residence in the Nova Scotia capital and develop one near the University of Prince Edward Island in Charlottetown. His long-term goal was to expand outside of Atlantic Canada.
But he put those plans on hold when demand dissipated in 2024 after the federal government announced plans to reduce foreign student permits by 35 per cent, in part to help address Canada’s unrelenting demand for housing.
Today, there are no students on the Granville Hall wait list, and for the first time in years, Mr. Al-Akhali has an empty room.
“If there is no demand, we can’t operate,” he said. “There were big plans to build new residences in Halifax. All of that is on hold.”
Mr. Al-Akhali is one of hundreds, if not thousands, of investors across the country who got into student housing as colleges and universities ramped up their enrolment of foreign students.
Investors of all sizes have poured millions of dollars into acquiring and developing privately-owned student housing, including single-family homes, condos, duplexes and student residences.
The doubling of international students over the past decade put immense pressure on communities and contributed to the rise in rents across the country. Many students paid more than the market rate for a room, and some lived in rooming houses and apartments that were overcrowded and may have had bug and mice infestations.
As landlords launch into a second school year under the new federal caps, the case for investing in student housing isn’t as obvious as it once was. Individual investors with properties off campus are bearing the brunt of the declining foreign student population, while larger investors with newer student residences on or near campus say they have seen little change in demand.
The aftershocks can be clearly seen in parts of Atlantic Canada and Ontario where foreign students account for a larger share of the student population compared to the rest of the country.
Before the cap went into effect, foreign students made up 21 per cent of Canada’s total student population at public postsecondary schools in the 2022-2023 academic year, according to the most recent annual survey data from Statistics Canada. But in Prince Edward Island, international students accounted for 26 per cent of that province’s postsecondary population. In Nova Scotia, it was 22 per cent, and in Ontario, they represented 27 per cent. In Alberta, by contrast, they made up 15 per cent of the postsecondary group.
Under the current policy, the federal government allocates a specific number of international study permits to each province and territory. That means that Ontario, which used to attract just over half of the country’s international students, has had to shoulder some of the largest cuts.
Schools such as Conestoga College in Kitchener-Waterloo, Ont., that relied on international students for its growth have been particularly hard hit.
In the neighbourhoods surrounding Conestoga’s Waterloo campus, the rental rates have decreased more than the rest of the city. In the areas close to campus, the average monthly rent for a two-bedroom unit was $2,221 in 2025. That was down 5 per cent from the same period a year ago, according to data from Rentals.ca, which analyzed asking rents for March, April and May on its rental website.
By comparison, rents for a two-bedroom only dropped by 2.1 per cent in the rest of Waterloo over the same period.
“People are definitely feeling the pressure because of these vacancies,” said Noah Koop, a property manager in Kitchener. “To put all your eggs in one basket with a student rental was okay before, but now people are really scratching their heads,” he said.
Mr. Koop described a grim scene of agents from some of the city’s larger property management companies sitting in tents outside of their apartment buildings, where they tried to ask students walking by to consider renting their units.
That kind of soliciting for renters takes place in early August sometimes, but never in September as it did this year, he said. Landlords are particularly desperate in the lead-up to the start of the fall semester because their units can sit empty for months once students settle in for the school year.
Rent has dropped in other neighbourhoods close to colleges in the province. In areas close to Fanshawe College in London, Ont., for example, the average monthly rent for a two-bedroom fell 6.3 per cent to $1,662 between 2024 and 2025, according to Rentals.ca data. By comparison, the average monthly rent fell by just 2.8 per cent across London.
In neighbourhoods surrounding Mohawk College in Hamilton, the average monthly rent for a two-bedroom declined 6.7 per cent to $2,188, compared to rents falling 4.1 per cent across all areas of Hamilton.
In the neighbourhoods near St. Lawrence University in Kingston, the average monthly rent dropped 11.2 per cent to $1,996, compared to rents actually increasing by 5 per cent across the city.
Mr. Koop said landlords are doing everything from dropping their prices, accepting shorter lease terms and renting to tenants who they would have considered a liability before.
However, lowering rents isn’t so easy for many mom-and-pop landlords who bought during the height of housing market speculation early in the Covid-19 pandemic. Many got into real estate investing when mortgage rates were below 2 per cent and are now dealing with higher borrowing costs.
Nathan Levinson, founder of Royal York Property Management, said rents have dropped by as much as $700 to $800 at some properties his company manages in cities such as Kingston and London.
“My clients are saying, ‘I can’t afford to budge $100,’ and now we’re talking drops of $700, $800,” said Mr. Levinson, who started his company in London and now manages more than 25,000 properties owned by individual landlords across Canada – many of which cater to students.
He said many more of these investors will renew their mortgages in the coming year and will face higher loan payments while their rental income drops.
Mr. Levinson said it could be difficult for property owners to hold on to their properties when they are losing money. He predicts the situation will lead many owners to default on the mortgages and face foreclosure.
At universities in Atlantic Canada, where foreign students accounted for a larger share of the overall student body than other regions, the fallout from the new cap has been pronounced.
In 2024, full-time foreign student enrolment dropped by 2,983 students, or 11.4 per cent, to 23,237, according to the Association of Atlantic Universities preliminary survey of enrolments.
In Nova Scotia, Dalhousie lost 17.9 per cent, or 746, of its international students from 2023 to 2024, according to the data.
Saint Mary’s University lost 14.6 per cent, or 239 foreign students, over the same period. Cape Breton University in Sydney, N.S., lost 16.9 per cent, or 1,175 international students.
In PEI, the University of PEI lost 7.2 per cent, or 143 students, while in Newfoundland and Labrador, Memorial University lost 15.5 per cent, or 747 international students.
“I was surprised at how fast things changed,” said Kevin Russell, executive director of Rental Housing Providers Nova Scotia, which represents investors who collectively own more than 50,000 apartment rental units across the province.
Mr. Russell said in June of 2024, his members started noticing they were not getting as many applicants. A few months later, Mr. Russell said the rent discounts started.
Demand has declined just as developers have ramped up home building in the Halifax region. Over the past five years, from 2020 through 2024, housing starts are up nearly 50 per cent from the previous five years, from 2015 through 2019, according to data from Canada Mortgage and Housing Corp.
Students say the construction boom and the foreign-student cap have not made that much of a difference in terms of how much they are paying and how much their rent increases every year.
“People are paying prices that just don’t make any sense for the property that they’re staying in,” said Ethan Leckie, a fourth-year sociology student at Dalhousie.
Currently, Nova Scotia caps the amount a landlord can raise the rent by 5 per cent per year for existing leases. But many leases do not automatically renew after the lease ends. That allows landlords to get a new tenant and increase the rent by an amount greater than 5 per cent.
Mr. Leckie, vice-president of the university’s student union, is paying $735 to share one floor of a house with three other roommates. Located in the northwest end of the city, the house is about a 30-minute walk from campus, with no convenient public transportation.
Previously Mr. Leckie was paying $1,200 per month to share a two-bedroom apartment in a high-rise apartment building in the city that constantly had problems with mice and bedbugs. He said the only reason he found his current rental was because he got a lead from a friend.
“Students are getting taken advantage of in this market because they need to find a place to live. It’s not a choice where they live. We have to be near campus,” he said.
As many colleges and universities slash staff and programs to deal with the loss in tuition revenue, they are reassessing their student housing needs. Many institutions had plans to expand their residences to accommodate more students. For some schools, those expansion plans may become more critical as they try to find ways to generate revenue. More on-campus residences would allow them to attract a larger share student population along with a larger chunk of the rents.
Edward Ng, a partner at Ernst & Young who has worked with postsecondary schools for about 15 years, said about half of his university and college clients have said they are revisiting their student housing expansion or refurbishment plans while the rest are going ahead.
“Some institutions have said, ‘Let’s see how this plays out. Let’s put it on hold, and then revisit our enrolment, and then, as a result of that, revisit our student residence needs,” said Mr. Ng, who works in the firm’s infrastructure advisory business.
“But also there are projects that are still happening where institutions are moving forward with student residences,” he said.
That could be fruitful for bigger investors, who typically have the capital to take on major projects such as a multiyear development for a school. Forum Asset Management, which operates 24 student residences in 11 cities, including Toronto, Halifax and Vancouver, said its occupancy rate remains above 90 per cent.
Forum managing partner Aly Damji said some of Forum’s student residences in Waterloo “have had some minor impacts with a little bit more vacancy” because Conestoga College lost more than 60 per cent of its foreign students. But he said Forum is still developing more student residences. It currently has three under construction, including one on campus at Toronto’s York University and another about 400 metres away from the University of Ottawa.
In British Columbia, large landlords are also unfazed by the change in federal policy. Rents in the province were so high to begin with that those landlords are able to continue with their expansion plans. As well, the metro Vancouver area has long faced extremely low vacancy rates.
Toby Chu, president and chief executive officer of Vancouver-based student housing developer Global Education Communities Corp., said he has easily filled all of his roughly 3,000 rooms across 10 student housing buildings.
Although rents have dropped by 2 per cent at Global Education Communities properties, the company is moving ahead with plans to build another six buildings – three of which are slated to be completed within the next four years.
For individual investors such as Mr. Al-Akhali, however, the future is more uncertain. Before the cap, he had seen how universities turned students away from their residences all the time.
Halifax was under particular stress because it is home to six university campuses: Dalhousie, Saint Mary’s, Mount Saint Vincent, University of King’s College, Nova Scotia College of Art and Design, and Sainte-Anne University. It is also home to the Nova Scotia Community College and the Atlantic School of Theology.
He had wanted to bring a privately-owned student residence to the area that would provide a similar on-campus experience. After Granville Hall opened in 2016, it was quickly inundated with the overflow from universities.
“When we saw that we have wait lists of over 100 people every year, we started looking for other properties to expand into,” Mr. Al-Akhali said. “Sure enough, that wait list disappeared. So now everything is on hold to see where things will settle,” he said.
This article was first reported by The Globe and Mail
