Ghost Students, Empty Homes: What Happens When Foreign Enrolment Collapses?

Canadian real estate—especially condos marketed toward foreign and student tenancies—has been built on a fragile foundation. Between 2020 and 2022, mortgage-backed studios, micro-condos, and co-living buildings flooded the market. Yet much of that demand came thanks to international students, many enrolled with no intention of staying or studying full-time. Now—in 2025—this veneer is cracking. A collapse in international student enrollment threatens to leave entire buildings vacant, rental markets oversupplied, and speculative investors underwater.

In this comprehensive exposé, we dissect:

• How Canada became a global student magnet (2015–2023) and how that drove housing speculation

• What changed in 2024–2025, from caps to declining credibility

• The fallout in key cities, with ghost campuses, emptied housing towers, and mounting financial risk

• Worst-case scenarios, from abandoned units to institutional bankruptcies

• Key data points, regional breakdowns, and who should be wary now

• Actionable takeaways for buyers, renters, investors, and policymakers

Student + Speculator Boom: The Market Setup (2015–2022)

At its peak, Canada hosted over 1.04 million international students in 2023, nearly 30% year-over-year growth and a record high ICEF Monitor. These students disproportionately concentrated in Ontario and British Columbia (526,000 in Ontario; over 202,000 in BC) ICEF Monitor.

Developers, universities, and city planners responded. Entire condo towers in Burnaby, Richmond, and Toronto were built to host students paying high rent, often rented via strata or short-term platforms. Private colleges like University Canada West saw over 95% of their enrolment from foreign study permit holders Wikipedia. Post-secondary reliance on this revenue formed the huge undercurrent fuelling both tuition and condo prices.

The Crack Appears: Enrollment Crash & Policy Shock (2023–2024)

A sudden pivot in federal policy drastically altered the landscape:

• Institutions reported an estimated 45% drop in international enrollments in 2024 vs. 2023, with some calling it the sharpest decline in modern memory.

• Ontario expected a 41% cap reduction, BC around 18%.

• IRCC data revealed nearly 50,000 ‘no-show’ students in spring 2024—6.9% of permits issued—suggesting widespread misuse.

• Colleges such as Conestoga announced major layoffs and program cuts after losing over half their international enrolment.

Universities Canada warned the fallout was deeper than predicted—impacts on budgets and reputational damage may take 5–7 years to recover ICEF Monitor.

Ghost Towers & Market Fallout

The student housing ecosystem is already unraveling:

• In Burnaby’s student-heavy towers (e.g., mini-condos between Metrotown and Edmonds), up to 30–40% of rooms lie vacant, with investor owners struggling to attract any tenant.

• Richmond and Pacific Blvd developments built for high-yield student rentals are seeing price discounts of $60K+ just to get occupancy.

• In smaller college towns—like Kelowna, Abbotsford, Victoria—student-specific housing units are sitting empty, with no local renter base to absorb them.

• Multi-gen boarding houses in Chinatown re-splitting condos into dozens of rooms—sometimes without strata approval—to cobble together occupancy.

This is not subtle—it’s silent, but the vacancy rate tick is unnerving.

Cities Under Pressure: Regional Snapshot

Vancouver / Burnaby

• Million-dollar condos built on student yield assumptions are hemorrhaging cash flow.

• Universities and colleges deferred expansion; newly completed units now belong to distressed assignments.

Kelowna / Victoria / Abbotsford

• Smaller post-secondary hubs lack workforce housing buffering; student-specific units go virtually unleased.

• Municipalities now must consider repurposing these buildings or face a long-term oversupply.

Toronto / GTA

• Suburban student towers and co-living startups face fierce competition and rising vacancy in downtown corridors.

Domino Effects: Renting, Tuition, and Financial Fragility

• Rental vacancy rates creeping above 5% in student-laden zones, pushing rents lower and stripping yield from investors.

• Investors, unable to cover mortgage with tenant income, either refinance at distress rates or list assignments at large losses.

• Universities face enrollment gaps and revenue shortfalls; staffing cuts and program cancellations follow.

• Neighborhoods lose economy: fewer students = fewer commuters spending on transportation, food, retail.

New Equifax data already shows a 22.7% rise in mortgage delinquencies in Q1 2024, especially in Vancouver and Toronto.

Key Actions for Stakeholders

Buyers & Renters

Avoid student-centric micro-condos off campuses. Instead, seek established, amenity-rich buildings not dependent on volatile student occupancy.

Investors

Run downside models with 30–50% vacancy risk. Avoid leveraged student-only buildings, expect longer hold timelines or forced discounts on assignment.

Universities & Colleges

Diversify enrollment strategies, invest in compliance and student experience, and plan for 5–7 year stabilization period post-crash.

Municipal Leaders & Planners

Rezone for conversion of student housing to affordable rental and missing-middle. Track vacancy data more aggressively, enforce short-term rental deregulation tightening.

Building Towers on Debt: Development Fueled by Student Demand

Pro-Forma Dreams Turn to Financial Nightmares

Between 2018 and 2021:

• Developers across cities like Burnaby, Richmond, Toronto, and Halton Hills launched over 20,000 purpose-built student housing units, often pre-sold to investors based on 5–7% gross rental yield expectations, assuming full occupancy.

• Land assembly costs and project capitalization assumed steady growth in foreign student enrollment—a bet that unraveled when volume dropped, but approval pipelines remained frozen in 2022 pricing optimism.

A conversation with a Vancouver condominium project manager (on background):

“We priced our towers expecting 2,200 international student beds. Today we have 1,200—half the occupancy forecast, half the cash flow.”

These towers—and their financing—are now stretched thin. Some:

• Have unfilled developer-held units (40–80%)

• Cannot refinance completed phases due to valuation decline

• Are sellering (selling the project) at deep discount or abandoning phases entirely

Conversion Proposals Sit Stalled

Several cities—Victoria, Nanaimo, Surrey—have proposed rezoning student towers into long-term rental or affordable housing, but:

• Developers don’t want to lose rental yield in early years post-construction

• Municipal incentives (e.g., tax breaks or grants) are not fast or generous enough

• New By-Laws for zoning change require time-consuming consultations

The end result? A growing body of blank-faced, water-cooled, elevator-serviced units unfurnished and unsold—financial assets without cash flow.

University Budgets at Risk: Tuition Revenue Gap

International students paid 3–4x tuition of domestic students. Many post-secondary institutions came to rely on them as a significant revenue source:

• In BC, UBC and UVic derived 28–32% of tuition from international students in 2022.

• Across Ontario universities, international fees made up 24–27% of tuition revenue.

• Several mid-size colleges reincorrect enrollment from tuition-rich strategy to full-cohort risk.

Programs have been cut. Hiring paused. Expansion plans shelved. Smaller institutions that were diversifying on international tuition (like Algonquin, Sheridan, Kwantlen) now face budget gaps of $15–25 million in 2025.

Alumni donor campaigns, auxiliary streams (housing, food services), and ancillary revenues are shrinking, and regaining international enrollment confidence is likely to take 5–7 years — on par with a degree lifecycle.

Cultural Shifts & Rental Consumer Behavior

For decades:

• Many international students lived in single-bedroom rentals or mini-condos, paying $1,200–1,500 monthly in Vancouver between 2018–2021.

• Student roommates and group housing subsidized pricing for landlords and investor-backed buildings.

But in 2025:

• Student rent demand is down – empty rooms are the norm, landlords are handing back keys to strata.

• Millennials and postpartum professionals aren’t swapping for smaller, utility-cost-ridden student units—no transit access, no retail, no security.

• The rise in remote learning and hybrid degrees lowers university attendance demand and displaces campus-adjacent rental reliance.

Units once rented in bulk to short‑term tenants are now either vacant, boarded, or listed at massive discounts.

Financial Fallout: From Local Loss to Institutional Split

Investor Level Defaults

Many small-scale landlords:

• Bought micro-condos or mini suites without intentions to live there.

• Now face loans with negative cash flow, stripped equity, and worsening valuations.

• Are defaulting on mortgages or selling units at 30–40% loss, meaning walkaways or strategic defaults.

Developer and Lender Exposure

• Private banks and lenders supporting student developments are facing non-performing loans and impaired collateral.

• Some bonds tied to rental revenue have fallen below 40 pence, prompting written-down book losses.

• Municipal tax revenues tied to development charges and occupancy fees have stalled—impacting city budgets.

Credit System Risk

• CMHC’s insurance exposure to student-led housing is now significant.

• If multiples waves of defaults strike condos co-signed or financed through high-ratio loans, CMHC loss pools may strain provincial budgets and prompt federal bailout pressure.

Global Comparison: International Education & Real Estate Bubbles

Similar phenomena have occurred in:

• Australia, especially Melbourne, early 2000s—rented micro-apartments built for students and crash-lost valuations.

• UK university towns saw oversupply in student private halls after Brexit.

• U.S. college towns experienced mid-2010s real estate busts when enrolment dipped.

Canada’s scale—15 provinces with localized surpluses—makes this uniquely complex. We’re not just balancing Vancouver or Guelph; we’re dealing with half a dozen undersupplied colleges and overbuilt satellites all exceeding tolerance simultaneously.

Future Scenarios: Ordered vs Chaotic Home Risk

Scenario A: Conversion + Stabilization

Units converted into shared workforce housing near transit (via zoning changes and tax rebates). Vacancy rates return to under 3%, investor losses are limited to the least liquid micro-condos.

Scenario B: Depreciation Plateau

Student enrollment recovers partially—but values stagnate. Units sell at deep losses; rental demand shifts; investor confidence remains tepid. Market is slow & sclerotic, but not flammable.

Scenario C: Full Supply Cascade

If enrolment stays below 70% of peak, for 3+ consecutive years:

• Vacancy creeps above 10% in student-heavy towers.

• Landlords default or face legal cash strain.

• Strata corporations face special levy crises.

• Developers abandon partially completed phases.

• Municipal mortgage tax and appeal valuations crash.

This cascade is not just real estate — it signals a cultural and generational market shift.

What You Must Do Now

If You're Buying a Student-Proximate Property

Avoid unless it's proven in-demand, not high student occupancy, along transit, and backed by pre-rent or long-term lease guarantee. Prefer mixed-use or local-owner-rendered units.

If You're Renting

Avoid buildings heavily marketed as “student central.” Seek buildings with stable working-class populations or amenities rare in student zones (parks, grocery, transit).

If You're an Investor

Run severe downside models: expect 40–50% lower occupancy, 30–40% capital loss, and 5+ year hold times. Don’t rely on rent recovery from ‘nestables’ or short-term listings.

If You're a City Planner or University Admin

Track enrolment with real estate and vacancy data; proactively zone for building repurposing, incentivize conversions, and plan for a 5–7 year healing period. Start publicly allocating units to affordable renter flow.

Final Thoughts: Hard Reset or Opportunity?

The collapse of foreign student enrollment is exposing a deep flaw: housing demand based on a transitory population, not anchored occupancy.

If Canada navigates this carefully—emphasizing transitions, conversions, sensible policy, and avoiding overreaction—it can recalibrate without chaos. If we delay or misjudge, we’re headed for years of supply glut, price corrections, and investor trauma. The demographic and cultural shift in demand is real. The sooner we adapt, the shorter the damage.

Because when your city no longer has students to fill the seats, the condos built for them become curiosities—and eventually, liabilities.