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How international student study permit cap is affecting Windsor rental market · Kvetch & Release

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  Speaker 1: Came across a really interesting article that is talking about
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  Speaker 1: the rental market in the country and how Canadian universities
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  Speaker 1: are citing surprising rental market downturns. Globe and Mail put
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  Speaker 1: this one out. The cap for twenty twenty four international
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  Speaker 1: study permits was set at three hundred and sixty thousand
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  Speaker 1: study permits for the country, which was a thirty five
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  Speaker 1: percent reduction from the previous year. And I wanted to
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  Speaker 1: know how international student study permits cap has affected our
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  Speaker 1: rental market. Here locally joining me is the owner of
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  Speaker 1: Goldmar Property Management. Patrese Surrett joins me right now, How
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  Speaker 1: are you doing great? How are you doing very well?
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  Speaker 1: Thank you? So just right off the bat here, what's
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  Speaker 1: the rental market looking like today compared to I don't know, say,
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  Speaker 1: maybe a year ago.
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  Speaker 2: Well, yes, very different, very different. And I think that
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  Speaker 2: everyone wasn't really sure what kind of impact that would
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  Speaker 2: have because they did announce that where they were capping
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  Speaker 2: that student enrollment, and everyone knows like Windsor is very
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  Speaker 2: well known for international students, right, so we're very well
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  Speaker 2: known for that. And we definitely saw a decline this
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  Speaker 2: summer in those larger groups of international students coming looking
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  Speaker 2: for housing. It was a definite shift, Like definitely all
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  Speaker 2: felt it just a lot, a lot less activity out there,
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  Speaker 2: a lot less requests. We used to have that Labor
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  Speaker 2: Day weekend, we'd have this huge influct of people that
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  Speaker 2: just arrived looking for housing, and we really didn't see
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  Speaker 2: that this weekend. A little bit unsettling. A lot of
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  Speaker 2: the student rentals have had to adjust their pricing because
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  Speaker 2: they didn't expect to be empty after September one, and
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  Speaker 2: they are. So we've had a couple of our student
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  Speaker 2: rentals convert back and they're offering them to a family instead.
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  Speaker 2: It wasn't terrible for families, right, but a lot of
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  Speaker 2: those houses over by the university and stuff that have
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  Speaker 2: typically been for university students have definitely shifted back and
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  Speaker 2: they're just looking at alternatives or splitting it into two
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  Speaker 2: units possible instead of multiple room rentals. Yeah, definitely different, different.
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  Speaker 1: You know, it's I haven't followed the real estate market
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  Speaker 1: closely for a long time, but what it's been looking
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  Speaker 1: like is just these past couple of years since COVID
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  Speaker 1: hit everything, it just seems as rapidly in flux regardless
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  Speaker 1: of what the file is, and it's all impacting whatever
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  Speaker 1: the price is, whether someone is renting or leasing, or
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  Speaker 1: buying or selling or anything involved.
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  Speaker 2: Yes, for sure, And that's the thing. We saw that
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  Speaker 2: steady increase you know during COVID, and the demand was there,
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  Speaker 2: and real estate went crazy during COVID, you know, and
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  Speaker 2: Windsor very much became a hot market for people to
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  Speaker 2: come and invest in, which resulted in more of those rentals,
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  Speaker 2: right for sure. And yeah, you're right, like with those shifts,
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  Speaker 2: you very closely follow the real estate shifts, right, So
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  Speaker 2: now you know, single family homes don't actually make so
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  Speaker 2: much sense for being a rental because the mortgage rates
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  Speaker 2: when people went to renew, they just simply don't make sense.
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  Speaker 2: Even though back then we are getting really good rents
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  Speaker 2: for those single family homes. But now with the interest rate,
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  Speaker 2: you know, some of the owners are actually upside down
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  Speaker 2: on it, so the rent is not even covering what
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  Speaker 2: their new payment is.
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  Speaker 1: So that's a tough situation. It sounds like on the
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  Speaker 1: landlord side that that's making them a bit more desperate
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  Speaker 1: and having to you know, get whatever they can get
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  Speaker 1: in to be able to make whatever payments they can.
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  Speaker 2: Make possibly or they have a tenant, right, and the
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  Speaker 2: tenant moved in years ago. Great tenants, but that rent
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  Speaker 2: is not keeping up with the new payment that they're making. Right,
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  Speaker 2: tax have gone up, their mortgage payments now gone up.
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  Speaker 2: So what do they do? Right? A lot of times
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  Speaker 2: they're just choosing to sell it because and unfortunately it
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  Speaker 2: you know, un houses a tenant and it's a perfectly
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  Speaker 2: good tenant. Now it's just that their rent doesn't cover
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  Speaker 2: it anymore.
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  Speaker 1: That's a tough situation. You were saying that rents are
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  Speaker 1: going down here as some landlords are having to affect
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  Speaker 1: their pricing to entice some in. I'm wondering what we're
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  Speaker 1: looking at in terms of like average rents or if
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  Speaker 1: things have started to impact that more broadly.
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  Speaker 2: We don't. Yeah, it's hard to see because the average all, yeah,
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  Speaker 2: it's all over the place. And it's really with this
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  Speaker 2: student rentals. Like again, these big student rentals, you know,
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  Speaker 2: seven or eight bedroom rentals that have always been full
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  Speaker 2: with big groups that come in, you know, and they
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  Speaker 2: would take them, and now we're sitting with them, and
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  Speaker 2: it's the question of what do we do if a
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  Speaker 2: student group doesn't take them?
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  Speaker 1: Now?
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  Speaker 2: Right, and room rentals are not really the best way
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  Speaker 2: to do it because the city with the licensing, that's
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  Speaker 2: also impacting. Right, they don't want there to be big
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  Speaker 2: houses with room rentals. They want to see big, one,
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  Speaker 2: one group leases. So we're kind of stuck, right, people
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  Speaker 2: want to convert to the room rentals, but even room
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  Speaker 2: rentals now you know, we're seeing anywhere between six fifty
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  Speaker 2: seven fifty just to rent a rooms.
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  Speaker 1: It's it's such a complicated thing to be able to
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  Speaker 1: track across the whole board here. But I wonder, so, like,
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  Speaker 1: how is this affecting different groups? Then, like how is
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  Speaker 1: this affecting buyers right now?
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  Speaker 2: So the buyers again, when they're trying to finance these
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  Speaker 2: larger or you know, say a student rental, and typically
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  Speaker 2: they've had these big dollar leases, which is great, but
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  Speaker 2: if it's vacant, they're basing that purchase price on what
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  Speaker 2: they could potentially get, right, and what we've seen over
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  Speaker 2: the last years, the rents have gone up, the rents
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  Speaker 2: have gone up, But now if it's vacant, you're really
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  Speaker 2: taking a chance that you're going to pay based on
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  Speaker 2: what that rent was last time it was rented, and
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  Speaker 2: it may not fetch you the same because the enrollment's down.
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  Speaker 2: So now we may not be able to rent it
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  Speaker 2: for thirty two hundred, right, we may have to go
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  Speaker 2: back to the twenty six hundred that it was a
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  Speaker 2: couple of years ago. It's all a gamble because you
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  Speaker 2: really don't know, right, if the tenants are there and
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  Speaker 2: you have a lease in place, that's one thing to
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  Speaker 2: purchase that property because you know that lease is already
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  Speaker 2: in place, right, so the income is verified when we're
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  Speaker 2: basing it on, well, the last lease was this, you know,
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  Speaker 2: when you're doing your financing on that, it could be
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  Speaker 2: it could be trouble if we can't get that much anymore.
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  Speaker 2: We don't have the people, and you don't want to
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  Speaker 2: be gambling with this.
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  Speaker 1: I see here in this Globe and Mail article as well,
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  Speaker 1: one of BC's private I guess private colleges that catered
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  Speaker 1: almost exclusively to international students. That's University of Canada West.
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  Speaker 1: They're saying that they're getting anywhere from fifty eight to
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  Speaker 1: one hundred percent drops in Google searches, depending on what
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  Speaker 1: terms that were used in the search. Just going to
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  Speaker 1: show that, I mean, yeah, it seems very significant impacts
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  Speaker 1: from this international student study cap yep. How quickly did
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  Speaker 1: they impact the rental market when they started showing up
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  Speaker 1: in large numbers?
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  Speaker 3: Was it immediate when they were showing up in large numbers, Yes,
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  Speaker 3: like they would come and we almost had a hard
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  Speaker 3: time accommodating how many international students came, right Like, we
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  Speaker 3: were very much overwhelmed with the numbers of people coming
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  Speaker 3: and trying to find them suitable accommodations.
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  Speaker 2: Whereas now the groups that are out there, they can
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  Speaker 2: be more selective, which is great for tenants, right, but
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  Speaker 2: there's so much inventory that they're able to pick which
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  Speaker 2: run they want rather than them taking whatever's left. So
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  Speaker 2: is the people that come labor day weekend used to
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  Speaker 2: kind of take whatever was left unfortunately, Right.
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  Speaker 1: Well, you show up here at the end of the
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  Speaker 1: summer to move into where you've got to move in
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  Speaker 1: because classes start.
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  Speaker 2: That's right. But now they have availability that they could
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  Speaker 2: absolutely you know, have some choices out there. So it's
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  Speaker 2: just very different that the landscape's very different now and
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  Speaker 2: it happened very quickly too.
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  Speaker 1: So I guess here's my last question before you before
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  Speaker 1: I let you go. Is this the market stabilizing or
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  Speaker 1: is this still a market that's in flux right now, Like,
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  Speaker 1: what's actually happening? What are the vibes?
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  Speaker 2: I don't know if it's I mean, they said that
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  Speaker 2: that cat's going to be a two years. I think
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  Speaker 2: they're going to keep that student cap on. So unless
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  Speaker 2: they really unless the university pivots and does more marketing
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  Speaker 2: towards you know, Canadian students, I don't know how that's
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  Speaker 2: ever going to stabilize itself. Maybe in three years, but
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  Speaker 2: I think the stabilization is going to be the current
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  Speaker 2: owners that maybe lend themselves more to student rentals, that
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  Speaker 2: may have to just shift that mindset because there's still
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  Speaker 2: the group of people out there that still can't quite
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  Speaker 2: qualify for a mortgage because of the interest rates. Right,
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  Speaker 2: So we have really really qualified tenants looking for housing,
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  Speaker 2: but now we have some openings in some of those
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  Speaker 2: bigger houses over by the university that just typically always
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  Speaker 2: rent to students. So now we see them saying, Okay,
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  Speaker 2: well maybe we'll just get a family instead. Right, So
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  Speaker 2: stabilization maybe where we're balancing it out more to families, couples,
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  Speaker 2: working professionals rather than students. But it happened so quickly
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  Speaker 2: that you know a lot of people are caught off
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  Speaker 2: guard a little bit. We just assumed that they would
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  Speaker 2: fill up again, and we're really we've bur left with
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  Speaker 2: a lot of student rentals that we didn't think we
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  Speaker 2: would be. Now we have to figure out what we're
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  Speaker 2: going to do with them and how to rent them.
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  Speaker 1: Sounds like a difficult situation, having to pivot on demand
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  Speaker 1: like that. I don't appreciate it, but I sympathize with
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  Speaker 1: you for having to deal with that one and for
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  Speaker 1: people who re find themselves in a period of flux
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  Speaker 1: right now. But I want to thank you so much, Patrice,
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  Speaker 1: for joining me to help break down this for us
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  Speaker 1: a little.
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  Speaker 3: Bit, no problem.
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  Speaker 1: Thank you so much, You tacome Patrise. Surrette is the
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  Speaker 1: owner of Goldmark Property Management.