The demand for student housing in B.C. is expected to remain resilient despite new caps on international students, with domestic students making up for any shortfall, say experts.

The federal reduction in international student permits may not make much of a dent in student housing demand because there remains a strong need for new quality inventory, says a report by Bonard, a Vienna-based housing intelligence firm.

“There is a serious undersupply in the market,” said Patrik Pavlacic, Bonard’s chief intelligence officer.

Canada’s international student population had an average annual growth rate of 8.6 per cent from 2018-19 to 2023-24, and Vancouver’s international student population grew three per cent from 2022-23 to 2023-24, said the Bonard report, meaning there’s still plenty of them around.

Pavlacic said the “provision rate”—the relationship between number of beds and number of students—is just 15 per cent in Canada, compared with much higher levels in other popular destination countries. France has a provision rate of 25 per cent, Germany 26 per cent and the U.K. 37 per cent, for example.

The provision rate for Vancouver sits at 17 per cent, with a “missing supply” of 79,007 beds, said the Bonard report.

Bonard tracked new student housing developments in 24 cities across Canada, and found there are about 25,000 new beds in the pipeline, which would only cover about 3.5 per cent of current demand needs in Canada, said Pavlacic.

“In addition to the undersupply now, there’s not enough pipeline, there’s not sufficient number of beds to be built in the foreseeable future to sort of offset for the growth in demand,” he said.

One student housing provider says the international caps might have a short- or medium-term impact, and that Canada needs to do some “soul-searching” about the role of foreign students in the nation’s education economy.

“I’ve seen U.S., U.K., Australia doing a reset of their student visa policy every seven to 10 years,” said Toby Chu, president of Vancouver-based Global Education Communities Corp. (GEC), which has a private portfolio of student housing in B.C.

“I haven’t seen any reset in Canadian international student visas for, I don’t know, 38 years. I think it’s time for a bit of an adjustment, fine-tuning and correction. It’s not a bad thing, we’ve got to do what we’ve got to do,” he said.

The domestic component of GEC’s properties has grown from 11 per cent to 44 per cent this year, and Canadian students took over any available beds vacated by lower international enrolments, Chu said.

Reduced visa entry will impact the long-term pipeline if the cap remains in place forever, though there will be no impact on domestic demand, he said.

“For now and in the near future, the supply and demand for this niche market remain in a catch-up mode,” he said.

Douglas College is in the process of building its first residence building at its New Westminster campus. The residence is scheduled to open in mid-fall 2027, will consist of 368 single student rooms with shared bathrooms, and will be attached to a new academic building.

Sarah Dench, Douglas’ vice-president of student affairs, said the institution performed demand analyses and surveys to ensure the residence will be filled, even if the number of international students falls significantly. International students currently make up around 27 per cent of the student body, she said.

“We never modelled on the basis of our international student demand. We always wanted to be more cautious and do our demand analysis really carefully,” Dench said.

“Even if [the new residence] was only for domestic students, we could easily fill that probably a few times over.”

Institutions like Douglas have already seen past fluctuations in international enrolment due to things like COVID, currency exchange rates and geopolitical crises.

“We did not want to overextend ourselves or put ourselves in a position where we were more vulnerable to the ups and downs of international students and the enrolment numbers,” Dench said.

Immigration, Refugees and Citizenship Canada plans to issue a total of 437,000 study permits this year, a 10-per-cent decrease from the 2024 cap, according to a January announcement.

The federal government’s May 27 throne speech announced a further ceiling, saying the total number of temporary foreign workers and international students will be capped at five per cent of Canada’s population by 2027.

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