The Canada housing sector has faced a major challenge as the Bank of Canada (BoC) has moved to aggressively raise the benchmark interest rate in 2022. On October 26, the BoC raised the benchmark rate to 3.75%. That is the sixth interest rate hike the central bank has triggered so far this year. Some experts predict that the bank will keep interest rates at this relatively high level through to the end of 2023.
Bridgemarq Real Estate (TSX:BRE) is a Toronto-based company that provides various services to residential real estate brokers and REALTORS in Canada. Shares of this real estate stock have dropped 15% in 2022 as of close on October 26. The stock is down 20% year over year.
This company released its second quarter fiscal 2022 earnings on August 9. Revenue in the first six moths of fiscal 2022 was largely flat in the year-over-year period at $27.2 million. Meanwhile, net and comprehensive earnings were reported at $16.0 million or $0.75 per diluted share – up from a loss of $1.62 million or $0.17 loss per share in the previous year.
Investors should expect Canada housing to continue to take a hit in this environment. However, high immigration levels and low supply should underpin prices and sales to an acceptable degree in the face of soaring interest rates. Shares of this real estate stock currently possess a very attractive price-to-earnings ratio of 7.8. Meanwhile, it offers a monthly dividend of $0.113 per share. That represents a monster 9.8% yield.
