5 TSX real estate stocks to explore as GTA rent soars in Q2

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5 TSX real estate stocks to explore as GTA rent soars in Q2

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 5 TSX real estate stocks to explore as GTA rent soars in Q2
Image source: ©2022 Kalkine Media®

Highlights

  • Condo rents (average per square foot ) reportedly increased by 5.8 per cent in the Greater Toronto Area (GTA) in Q2 2022
  • Urbanation said that annual rent growth was 16.7 per cent in Q2
  • The FSV stock gained by almost 15 per cent in the last one month

Investors with a focus on a long-term approach could consider quality TSX real estate stocks like FirstService (TSX: FSV), Colliers (TSX: CIGI), Tricon Residential (TSX: TCN) etc. to derive substantial value and gain exposure to Canada’s real estate market.

Condo rents (average per square foot ) increased by 5.8 per cent in the Greater Toronto Area (GTA) in Q2 2022 compared to Q1 2022, according to Urbanation, an agency providing data and analysis on the condo and rental markets since 1981.

The industry tracker said rent prices reached new highs with annual rent growth of 16.7 per cent in the latest quarter.

So, let us look at five TSX real estate stocks amid this new development.

So, let us look at five TSX real estate stocks amid this new development.

1.     FirstService Corporation (TSX: FSV)

FirstService reported a revenue surge across its business lines, leading to consolidated revenue of US$ 834.6 million in Q1 FY2022, representing a year-over-year (YoY) rise of 17 per cent (including organic growth of 10 per cent).

The FSV stock gained by almost 15 per cent in the last one month, and this real estate stock seems to have a moderate-to-high momentum currently, with a Relative Strength Index (RSI) of 66.71 on July 21, as per Refinitiv.

2.     Colliers International Group Inc (TSX: CIGI)

To expand its US operations, Colliers recently completed an investment in Rockwood Capital, a New York-headquartered real estate investment company. As per the definitive agreement, the Canadian real estate company now owns a 65 per cent stake in Rockwood with this investment and expects its annual run rate of management fee revenue to range between US$ 70 million and US$ 75 million.

The CIGI stock shot up by roughly 17 per cent in one month and, as per Refinitiv, held an RSI of 65.34 on July 21.

3.     Tricon Residential Inc (TSX: TCN)

Tricon Residential reported a net profit of US$ 163.5 million in Q1 2022, marking a significant growth of 290 per cent YoY. The TCN scrip plummeted by over 28 per cent year-to-date (YTD). Refinitiv data suggests that this midcap real estate scrip held a rising RSI value of 54.88 on July 21.

Urbanation says GTA rents zoom in Q2. 5 TSX real estate stocks to buy?©Kalkine Media®; @rizelleannegalvez via Canva.com

4.     Altus Group Limited (TSX: AIF)

Altus Group posted consolidated revenues of C$ 167.6 million in the first three months of 2022, indicating a 22.2 per cent from Q1 2021. As for its stock performance, Altus Group jumped by over 11 per cent quarter-to-date (QTD). As per Refinitiv data, AIF stocks noted an RSI value of 66.95 on July 21, which shows moderate-to-high momentum in the stock market.

5.      Melcor Development Ltd (TSX: MRD)

Melcor posted a top line surge of 23.2 per cent to C$ 53.30 million in Q1 FY2022 compared to C$ 43.27 million a year ago. Melcor’s net profit grew notably by 117.6 per cent YoY to C$ 2.47 million in the latest quarter.
The MRD stock sank by over 12 per cent in 2022 and, as per Refinitiv findings, noted an RSI of 48.45 on July 21.

Bottom line

The TSX Capped Real Estate Index fell by over 20 per cent this year. However, real estate stocks could be an area to explore if looking for long-term value. These TSX real estate stocks can also offer stable dividend income in the long run.

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

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