The Impact of COVID-19 on The Canadian Student Rental Market
As schools all over the country prepare to reopen, real estate property investors are nervous regarding the eventual state of the student rental market in Canada. The coronavirus pandemic has forced many Canadian universities and schools to launch remote learning programs that will remain in effect until 2021. However, the question on everybody’s mind is this – will student rentals decline due to this new paradigm?
Geoff McTrait from Timbercreek stated that the student rental market has been going strong during the pandemic, just like other real estate sectors in Canada. Aside from the province of Quebec, student rental unit demand has stayed robust since most university students believed that the pandemic would be done and dusted by September, thus allowing them to return to class by then. Quebec’s later leasing cycle allowed students in the province to take more time before arriving at a decision regarding their housing arrangements. Students in Quebec have until August or early September to sign their leases, which has been a godsend for most of them.
Instead of cratering the student rental market, the pandemic has simply diverted rental demand to other locations as universities and colleges across the country slash their student housing capacity in a bid to ensure the safety of their on-campus student residents.
McTait stated that investors have to offer units with a private bathroom and sufficient space to stay safely isolated if they are to take advantage of the increased off-campus student housing demand. Student ghettos are no longer acceptable.
Even before COVID-19 broke out, students had been demanding more comfort, amenities, and space in their rental units. The latest rental units have better designs and construction quality compared to the cramped units seen on most campuses. However, the former units were typically preferred by international students. Of late though, Canadian students are no longer content with tiny rooms that only have WiFi and a bed as their biggest selling points. Parents who foot their children’s housing bills also want to ensure that their children stay in a safe and healthy environment where social distancing and cleanliness norms can be followed without a hitch.
Student housing demand has traditionally been dependent on post-secondary education enrolment. Although COVID-19 has led to Canada’s borders being sealed, for now, McTait believes that student rental investors should be worried regarding low enrolment numbers. As unemployment numbers are expected to skyrocket in the next few months, more Canadians are likely to return to university or college to improve their resume. Canada’s immigrant-friendly attitude and prepared response to the pandemic has made it an attractive destination for international students, who prefer Canada over the US.
The college lifestyle is also a major factor that’s expected to drive up student rental demand. Although some students may not be able to afford rental units due to financial hardships, the vast majority are expected to return to campus living facilities, so as to not miss out on a vibrant college life.
Although provinces like Kitchener-Waterloo, Vancouver, and Toronto are developing new student housing facilities at an incredible pace, demand is still predicted to outstrip current supply, making it a good time to be a student rental unit investor.
Picture Resource: School photo created by freepik – www.freepik.com