The stock market can be an indicator of many things, but can it tell us something about condo sales? Researcher Shaun Hildebrand thinks it might, according to an article in The Globe and Mail.
Hildebrand is a senior vice-president at Urbanation Inc., which studies the Toronto’s condo market, and he has found a loose correlation between stock market values and condo sales in Toronto. And he points out that the correlation has grown stronger in recent years.
“While new condo sales have followed the general path of many economic variables over the past 10 years with various degrees of correlation, their fairly close relationship to the stock market is worth paying at least some attention to,” he writes in a soon-to-be-published note, which also calls for more research on the topic.
The correlation between condo sales and the broad stock market (the S&P/TSX Composite index) is higher than for instance the correlation between condo sales and real estate investment trust indices, he says.
“Over the past five years in particular, new condo sales have shown a strengthening, albeit still moderate, correlation to stock market values with a one quarter lag,” writes Mr. Hildebrand who is a former senior market analyst at Canada Mortgage and Housing Corp. “While this may seem counterintuitive as condo investing is often thought of as a substitute for financial investments, it can suggest that condo buyers use financial gains to invest in condos, or buy units because they feel wealthier thanks to their rising financial portfolio. The same relationship occurs on the downside, where buyers feel more cautious as financial values slide.”
Read the full article by clicking on the link below:
Source: The Globe and Mail, What the TSX could tell us about Toronto condo sales by Tara Perkins
For more insight into the housing market within Durham Region, the Whitby real estate market, or the Brooklin real estate market, contact me. If you are an existing homeowner and are thinking about a, move, I can tell you what your house or condo is worth in today’s marketplace.
Re/Max Rouge River Realty Ltd., Brokerage
905-668-1800 or 905-427-1400