Real Estate Dodges Stock Market Turmoil

Technology and real estate stocks provided refuge from the stock market rout.

February 6, 2018 - The recent global selloff that has gripped stock markets comes as a result of rising interest rates and increasing evidence of stronger inflation. Market volatility briefly spiked to an over two year high as investors became worried that stronger inflation will lead to faster interest rate hikes and erode highly levered companies' future profitability.

When comparing the individual sectors that make up the Canadian S&P/TSX Composite Index, the real estate sector is among the least affected by the selloff. While likely as a result of having already dropped in value last year when interest rate hikes first began, it is important to note that direct commercial real estate has always had a long-term investment horizon with stable returns that can weather these market volatilities. ​​​​​

Canadian Sector Returns for the Last 3 Days of the S&P/TSX Composite Index

Source: Thomson Reuters, February 2018.​