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Hannah Alper, a Western University student, sits in front of her home in London, Ont., on July 1. She secured off-campus housing for this fall as early as November of 2021.Alicia Wynter/The Globe and Mail

Less than three months into her start at Western University, Hannah Alper had already secured off-campus housing for her second year.

Come September, the 19-year-old major in media and the public interest will be living in a detached home in downtown London, Ont., with six other roommates for a reasonable $550 a month plus utilities. It’s a deal she said she wouldn’t have been able to get if she hadn’t started house-hunting nearly a year in advance.

“Everyone my age or older than me was advising me to start looking in October-November,” said Ms. Alper, who lived in residence during her first year at Western. “It’s crazy.”

The availability and affordability of housing for students has long been a problem in big cities and some smaller towns with large university or college populations. But the resumption of in-person classes and the return of international students have been pouring fuel on the fire of an already overheated rental market.

The average asking rate for properties available on Rentals.ca, a national rental listing site, reached $1,888 a month in May – a 3.7-per-cent jump from April and a 10.5-per-cent increase over the same month last year.

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Rising mortgage interest rates are diverting some of Canada’s housing demand from the ownership market to the rental market, contributing to rapidly climbing rents and fierce competition among prospective tenants, some housing experts say.

And for coming international students, who don’t get a year’s head start in their search for accommodation, the rental challenge can be especially tough.

In Toronto, Sundeep Bahl, a Re/Max Real Estate Solutions salesman who represents condo investors, said that for the past two months he’s routinely been hearing from international students willing to pay up to a year’s worth of rent in advance. While landlords aren’t allowed to accept such offers, they’re an indication of the merciless rental-market reality facing many newcomers, he said.

Although short-term factors are exacerbating students’ rental woes, their struggles are a symptom of a broad and long-standing problem, according to experts such as Mike Moffat.

Canada has been welcoming a growing number of students from around the world, but has failed to properly account for their housing needs and build enough for them, said Mr. Moffatt, an economist and senior director of the Smart Prosperity Institute.

The number of international student enrolments at postsecondary institutions nearly tripled over a decade and stood at nearly 390,000 in the 2019-2020 academic year, according to numbers from Statistics Canada.

And while the number of study permit holders dropped in 2020, it quickly bounced back in 2021 and 2022, amid easing concerns about COVID-19, according to data from Immigration, Refugees and Citizenship Canada.

The increase reflects international recruiting efforts by both universities and colleges, as well as the allure of Canada’s immigration policy, which generally allows students to work both during their studies and after with a postgraduation work permit, said Mr. Moffatt, who served as an economic adviser to Justin Trudeau’s Liberal leadership between 2013 and 2015.

The ability to earn an income while in school, in particular, has helped colleges, which have lower tuition and attract more budget-conscious international students, said Mr. Moffatt. While universities still accounted for around 60 per cent of international enrolments in 2019-2020, the number of students from abroad at colleges nearly quadrupled in the decade until that point, the Statistics Canada data show.

And Canada’s easy pathway to permanent residency for international graduates means many students from abroad are likely to remain in the country, Mr. Moffatt said; the policy makes it easy for foreigners with Canadians credentials and work experience to integrate into the country’s labour market. But it also creates added housing demand that often isn’t matched by an increase in supply, he added.

Still, Canada’s undercounting problem doesn’t just concern international students. It extends to domestic ones as well, CIBC economists Benjamin Tal and Katherine Judge argued in a recent report. In addition to underestimating the number of immigrants and non-permanent residents, the country’s official tally of new households – which serves to estimate housing demand – also fails to count many Canadian students, Mr. Tal and Ms. Judge said.

That’s because in the population census, Statistics Canada considers postsecondary students’ usual place of residence to be that of their parents if they periodically return home or plan to do so in the future. That’s even if they live elsewhere during the school year or while working a summer job, the report says.

Over all, Mr. Tal and Ms. Judge estimate Canada is undercounting housing demand by close to 500,000 households, including students, immigrants as well as other non-permanent residents.

For Mr. Moffatt, that means house-hunting challenges aren’t going away anytime soon.

“We’ve already seen rental prices go up quite a bit in the last year and those pressures are likely going to continue,” he said.

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