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Highlights
- The S&P/TSX Capped Real Estate Index has decreased by around 16 per cent year-to-date (YTD).
- Despite the decline in the Canadian real estate sector, it brings an opportunity to buy on the dip.
- Some reports suggest that the housing market in Canada has entered the correction phase.
The Canadian housing market crisis continues, and the real estate sector in the country has declined continuously in 2022. Due to a dip in the overall real estate sector, the stocks of companies involved in the real estate business have not performed well compared to the previous year.
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The S&P/TSX Capped Real Estate Index has decreased by around 16 per cent year-to-date (YTD) and 11 per cent quarter-to-date (QTD). Some reports suggest that the housing market in Canada has entered the correction phase.
Although the stocks have declined, it also presents an opportunity for investors to buy on the dip. Hence, you may consider exploring the following stocks for your investment portfolio:
Canadian Apartment Properties Real Estate Investment Trust (TSX:CAR.UN)
The REIT acquires and leases residential rental properties across major urban centers in Canada. Canadian Apartment Properties Real Estate Investment Trust's (CAPREIT) portfolio comprises townhouses and apartments.
In Q1 2022, CAPREIT's operating revenues were C$ 246.6 million compared to C$ 227.5 million in the first quarter of 2021. The net operating income jumped to C$ 153.17 million in the same comparable period from C$ 146.65 million.
The CAR stock closed at C$ 48.04 apiece after declining 1.3 per cent during the trading session on June 8. As the stock had clocked a 52-week high of C$ 62.77, the stock is currently on the dip.
RioCan Real Estate Investment Trust (TSX:REI.UN)
RioCan focuses on retail and mixed-use properties and has a significant presence in Ontario, Canada. Meanwhile, the REIT has business operations in both Canada and the United States.
The REIT said that it had 1.1 million sq. ft. of new and renewed leases in the first quarter of this year. Also, RioCan's net income increased significantly to C$ 160.1 million from C$ 106.7 million in Q1 2021.
RioCan holds a dividend yield of 4.6 per cent and generally distributes a monthly dividend to its shareholders.
FirstService Corporation (TSX:FSV)
It is one of Canada's largest real estate companies and operates through FirstService Residential and FirstService Brands. On April 27, the company said it achieved better than anticipated results in Q1 2022.
FirstService's revenues increased to US$ 834.6 million from US$ 711.1 million in Q1 2021. Meanwhile, the adjusted EBITDA surged to US$ 62.3 million from US$ 59.8 million in the same period.
The FSV stock once traded above 200 Canadian dollars, and its 52-week high is C$ 256.01. The FSV stock closed significantly lower at C$ 161.21 per share on Wednesday.
Granite Real Estate Investment Trust (TSX:GRT.UN)
Although it is primarily involved in the acquisition and development of industrial properties, it has been affected by an overall dip in the real estate sector.
In Q1 2022, Granite announced closing C$ 193.6 million of new acquisitions as it expands its presence. Also, the net income increased to C$ 91.2 million, up by C$ 9.7 million from Q1 2021.
The GRT stock closed at C$ 86.7 apiece after declining 2.3 per cent on June 8.
Colliers International Group Inc. (TSX:CIGI)
Colliers provides real estate services and manages investments. On June 2, it completed a strategic investment in Basalt Infrastructure Partners LLP, an infrastructure investment management firm.
On May 17, Colliers announced a semi-annual cash dividend of US$ 0.15 per common share, which would be payable on July 14, 2022.
The CIGI stock declined by 1.4 per cent during the trading session on June 8 and closed at C$ 147.31 apiece.
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