The Canadian housing market has stayed scorching hot in the early months of 2021. This week, the Canadian Real Estate Association said that more than 70,000 homes were sold in the month of March. That number destroyed the previous record of 22,000 sales.
Meanwhile, the average selling price for a home sold on CREA’s MLS system reached $716,828 – up 31.6% from the prior year.
Economists from some of Canada’s top banks have called for policy makers to step in and cool this frothy market. However, policy makers are not eager to take any aggressive action considering the fragile state of the Canadian economy. I’ve still got my eyes on Canada’s top alternative lenders in this super housing market.
Equitable Group (TSX:EQB) is one of the top alternative lenders in Canada. Its shares have climbed 19% in 2021 as of close on April 15. The stock has soared 112% from the prior year.
In 2020, the company achieved its best-ever result. Diluted earnings per share rose 8% year-over-year to $12.95 in 2020. Loans under management had a CARG of 14.8% over five years and 15.1% over the last decade. Equitable Group’s customer base climbed 82% to 173,000 in 2020.
Best of all, Equitable Group stock possesses an attractive price-to-earnings ratio of 9.2.
Home Capital (TSX:HCG) is another top alternative lender that has come back strong since its near-bankruptcy in 2017. Its shares have dropped marginally in 2021. However, the stock is up 98% year over year. Investors looking for exposure to Canada housing should consider buying-the-dip in Home Capital today.
