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Feds offer financing help for student homes

January 26, 2010
By Elana Abramovitch

The federal government expanded financing for student housing in Canada last week in an attempt to increase the number and quality of student homes.

The government will finance up to 85 per cent of the property value for constructing, purchasing or refinancing houses built for students.

“This initiative supports the housing needs of Canadian […] universities and colleges,” Kate Munroe, media relations officer with the Canada Mortgage and Housing Corporation, said.

The offer comes in the form of a new mortgage loan-insurance offer supported by the CMHC.

The insurance protects lenders against mortgage non-payment, while allowing consumers to buy homes with only a five per cent down payment.

“This announcement is timely given that student housing needs are on the rise and currently exceed supply in most university [and] college cities in Canada,” Munroe said, adding demand is expected to increase because of enrolment growth and more international students.

On the other hand, Bill Hall, vice-president of operations at London Property Corp., said the demand for student housing in London may not require access to more funding.

“We have found the demand for student housing has been relatively consistent over the past five years or so,” Hall said.

Glen Matthews, housing mediation officer at Western and Fanshawe College, indicated the demand for student housing has increased for graduate students at Western and for students at Fanshawe at a rate of two per cent each year for the past few years. Conversely, the undergraduate student demand for housing has remained steady.

“We have a healthy vacancy rate,” Matthews said. “Other cities closer to Toronto have much lower vacancy rates, so there is a higher demand for student housing in those areas.”

Irene Nicholaou, audiology graduate student at Western, noted she had no problem finding student housing for the 2009-2010 school year.

“I found a house at the end of August on Kijiji,” Nicholaou said.

Matthews said the mortgage loan-insurance may still benefit some houses in London.

“I think this will be helpful for developers and academic institutions because even though London has a high vacancy rate, there is a fair bit of housing stock that is rather old so it will help create newer and safer housing for students.”

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