Student visa cap will ‘take a bit of pressure off’ rent prices: BoC’s Macklem
As the debate rages on about how to tackle rapidly rising housing costs, Bank of Canada governor Tiff Macklem says the newly announced cap on international student enrolments should help ease rent price inflation.
“You saw this week the government capping student visas,” Macklem said in an interview with The Canadian Press.
“That, I think, will help take a bit of pressure off rents going forward.”
The federal government announced a two-year limit on new study permits to get a handle on a soaring international student program.
Immigration Minister Marc Miller said at a cabinet retreat in Montreal on Monday that the number of new visas handed out this year will be capped at 364,000, a 35 per cent decrease from the nearly 560,000 issued last year. The number for 2025 will be set after an assessment of the situation later this year.
The decision was prompted in part due to the strain strong population growth is putting on the housing market.
Many economists agree that capping the number of new study permits issued may help moderate rent price inflation, however the degree to which it could ease rental prices is unclear.
“While I could see the growth rate and rent cooling off a little bit, I sincerely doubt that rents are going to go in the opposite direction,” said Douglas Porter, chief economist at Bank of Montreal.
“So bottom line is, I believe, we’re still going to be dealing with some pretty serious rent inflation in the next couple of years.”
The Bank of Canada has made significant progress in its fight against inflation that began in March 2022 when it started raising its key interest rate target. Prices are growing at a slower pace across the economy and fewer goods and services are seeing abnormally large price
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