The CN Tower is framed by condo buildings off of Fort York Blvd., west of Spadina Ave. in Toronto, Ont. REITs appear to be staging a smart comeback.Reviews and recommendations are unbiased and products are independently selected. Postmedia may earn an affiliate commission from purchases made through links on this page.The TSX topped 20,000 last week, driven by commodity and financial services sector, but another unsung performer was the real estate index.
But REITs appear to be staging a smart comeback. While the main S&P Composite is up 14.7 per cent, it has lagged the S&P TSX Capped REIT sub-index, which had shot up 16.3 per cent by the end of May. Scotiabank analysts believes REIT stocks should benefit from rebounding rental values that had taken a hit during the pandemic.
Indeed, recent home price appreciation has led to an an all-time-high gap of 68 per cent between cost of owning and renting, even though interest rates remain low. Residential rental relief measures in many provinces are also expected to roll off as vaccination numbers improve in Canada. In Ontario and British Columbia, eviction bans on residential and commercial properties end in September, while rental freezes are also expected to be lifted by the end of the year, offering further relief to REIT stocks.