2 real estate stocks to buy as Toronto housing market heats up

Highlights

  • Canadian real estate stocks could attract investors as the Toronto housing market is heating again.
  • These real estate stocks have yielded decent returns in the recent past.

As home resales climbed for the first time in five months, Toronto's housing market is searing again. According to the Toronto Regional Real Estate Board (TRREB), resales in the Toronto region were at 9,046 units in September, 18 per cent down year-over-year (YoY). However, this was the first month-over-month increase in resale activity since March 2021.

According to reports, the average selling price of a home in September was up by 18 per cent YoY to C$ 1,136,280. Meanwhile, the average price was up by 1.8 per cent in comparison to August in terms of seasonally adjusted basis.

As Canadian real estate market has remained the center of attraction, we are exploring two real estate stocks in this article:

Colliers International Group Inc. (TSX:CIGI)

With operations in over 60 countries, Colliers International is one of the biggest real estate services and investment management company. It offers various services to occupiers, investors, and commercial and residential property developers.

In August, the real estate company released robust results for the second quarter of fiscal 2021. Colliers International's revenue was US$ 946 million, representing an increase of US$ 395.8 million from the same comparable period last year.

Also Read: 5 best real estate stocks to buy in Canada

Giving the guidance update for the full year, the company had said that it expects its revenues to increase by 20 to 30 per cent in comparison to the previous estimate of 15 to 30 per cent. Meanwhile, the adjusted EBITDA will likely grow between 25 to 35 per cent in 2021 instead of the previous estimate of 15 to 30 per cent.

Priced at C$ 163.9 per share, the CIGI stock was up by 1.6 per cent at the end of trading session on Tuesday, October 5.

Toronto housing market and Canadian real estate stocks

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FirstService Corporation (TSX:FSV)

FirstService Corporation is a leading North American company dealing in the essential property services sector. It has two business segments -FirstService Residential and FirstService Brands.

On September 29, 2021, the Toronto-based real estate company extended its market leadership in Florida by acquiring the Condominium Association Management Division of Atlantic Pacific Companies (APAM), a fourth-generation real estate organization.

In Q2 2021, FirstService's consolidated revenues stood at US$ 831.6 million, up from US$ 621.6 million a year ago. In addition, the operating earnings increased to US$ 61.4 million in the second quarter of this year from US$ 44.9 million in Q2 2020.

Also Read: Tricon (TSX:TCN) eyes US IPO. How to buy the real estate stock?

The FSV stock closed 0.6 per cent higher at market close on October 5 and it was priced at C$ 226.42 apiece.

Bottom line

Real estate stocks could yield positive returns as the sector is performing well this year. The S&P/TSX Capped Real Estate Index has surged by 22.9 per cent year-to-date (YTD) and this sector could witness growth if real estate stocks continue to climb higher. 

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