The Canadian housing market has bounced back in the spring and summer of 2019, but there is still a significant diversion between east and west. Housing in Western Canada continues to suffer from plunging sales and stagnant price growth. In the East we can see a recovery in key markets and a return to solid price growth. However, sales are still down sharply from the peak of the market in 2016 and 2017.
Home Capital Group (TSX:HCG) stock has surged to 52-week highs on the back of a better market situation. The alternative lender was on the brink of collapse in the middle of 2017 but has since recovered and undergone internal restructuring. In its first-quarter 2019 results, Home Capital reported adjusted net income of $30.2 million or $0.49 per share which was up 14% from the prior year.
Equitable Group (TSX:EQB) stock has climbed 34% in 2019 as of mid-afternoon trading on July 25. Shares were hovering just below its 52-week high at the time of this writing. Equitable Group soared passed its own projections in 2018 as its Single-Family lending principal rose 14% from the prior year to $10.6 billion.
In the first quarter of 2019 the company put up another round of record results as adjusted diluted earnings per share increased 16% year-over-year to $2.72.
There are murmurs that policy makers could move to ease stress test requirements. That, combined with an increasingly dovish Bank of Canada, bodes well for the housing market as we look ahead to 2020.
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