Savills (SVS) & Sirius (SRE): 2 midcap housing stocks to buy

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 Savills (SVS) & Sirius (SRE): 2 midcap housing stocks to buy

Highlights 

  • Average property price rose by 0.7 per cent in October on a month-on-month basis, to £250,311 despite the ending of the stamp duty holiday.
  • It is a 9.9 per cent annual price rise and is also £30,728 higher than property prices in March 2020.
  • The housing sector is expected to be impacted in the future with an expected rate rise, the end of government support programmes and other factors.

The average property price in the UK reached £250,311, indicating a price rise of 0.7 per cent in October on a month-on-month basis, compared to a 0.2 per cent rise in September, according to lender Nationwide.

The survey data found prices rose by 9.9 per cent in October on year-on-year basis, compared to a 10 per cent annual price rise in September. The property price is also £30,728 higher from March 2020 levels.

The housing market has enjoyed a boom in the past 2 years due to a stamp duty holiday, and despite the stamp duty holiday ending on 30 September, the demand remained strong.

There has been strong demand for mortgage applications amid a supply shortage in the housing market. Mortgage applications stood at 72,645 in September, 10 per cent above its monthly average in 2019.

Industry experts, however, expect an uncertain future for the housing market as a potential rate rise is looming on the horizon amid inflationary pressure, and amid the end of government support schemes and other factors.

In this context, let us take a look at 2 FTSE 250 index listed real estate stocks with a return of over 75 per cent in the past one year:

  1. Savills PLC (LON: SVS)

Savills is a global real estate services provider. The company’s Irish business recently reported its FY 2020 results. Its profits dropped by 87 per cent to EUR 885,307 due to the impact of pandemic related restrictions.

Additionally, Savills’s holding company, Anatao Ltd, showed its revenues dropped by 40 per cent to EUR 34.1 million last year.

Savills, however had recently reported its FY 2021 results, where its group revenues rose by 18 per cent from £791.4 million in H1 2020.

SVS share price and volume

(Image source: Refinitiv)

Savills’ shares were trading at GBX 1,421.00, up by 0.64 per cent on 3 November at 09:30 AM BST, while the FTSE 250 index was at 23,152.72, up by 0.06 per cent.

The company’s market cap stands at £2,020.33 million, and its one-year return is at 75.87 per cent as of Wednesday.

  1. Sirius Real Estate LD (LON: SRE)

Sirius Real Estate is a leading operator and owner of business parks, offices and industrial complexes in Germany.

The company completed the acquisition of one office in Frankfurt and two business parks in Erfurt and Essen in Germany on Tuesday.

The consideration for the deals, which are all separate transactions, totalled about EUR 45 million.

SRE share price and volume

(Image source: Refinitiv)

Sirius Real Estate’s shares were trading at GBX 132.60, down by 1.92 per cent on 3 November at 10:08 AM BST, while the real estate services sectoral index was at 3,026.23, up by 0.09 per cent.

The company’s market cap stands at £1,438.78 million, and its one-year return is at 81.64 per cent as of Wednesday.

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