The Best Real Estate Stocks to Buy as Housing Prices Soar Across Canada

Yes, real estate stocks may not be a great choice all around, but these still look strong.

As housing prices keep going up across Canada, investors are looking at real estate investment trusts (REITs) on the TSX with wariness. It’s a way to get into the property market without having to buy buildings directly. Yet, right now hasn’t been the best time to invest. However, there are still many options allowing you to get in on growing sectors. So, let’s look at a few offering this up.

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Homes

One of the big names in the apartment business is Canadian Apartment Properties REIT (TSX: CAR.UN). With a value of around $6.6 billion for its market capitalization, CAPREIT is one of the biggest landlords in Canada. In 2024, the real estate stock reported funds from operations (FFO) per unit of $2.53. That’s an increase of $0.17 from the year before, which is pretty good. CAPREIT has been buying and selling properties strategically, like the $137 million purchase of The Pendrell in Vancouver. These moves have made its collection of properties stronger and put it in a good spot to take advantage of the growing need for rental homes.

Another important player is Boardwalk REIT (TSX: BEI.UN). It focuses on apartment buildings and other multi-family homes all across Canada. With a market value of about $1.7 billion, Boardwalk owns over 36,000 homes. The real estate stock works hard to keep its apartments full and has shown consistent growth, which has helped it do well even when the economy isn’t the greatest. People still need a place to rent, no matter what.

Retail

If you’re interested in REITs in the retail sector, you might want to look at Choice Properties REIT (TSX: CHP.UN). As the biggest REIT in Canada, with a market value of $9.9 billion, Choice Properties has a diverse bunch of properties. A lot of these are anchored by Loblaw, which is the biggest grocery store chain in Canada. In 2024, the real estate stock reported an FFO per unit of $1.032, a small but steady increase of $0.029 from the previous year. Choice Properties has also been buying properties strategically, like a 50% stake in an industrial property in Mississauga for $89.6 million. This shows it’s looking to grow and have different kinds of properties rather than a pure retail play.

RioCan REIT (TSX: REI.UN) is another big player in the retail world, with a market value of $5.8 billion. In 2024, RioCan reported funds from operations per unit of $1.78, up just a bit from the year before. The real estate stock has also been making strategic purchases, like a 50% interest in Lawrence Plaza in Toronto for $100.2 million. This highlights its focus on owning good properties that bring in steady income.

Granite REIT (TSX: GRT.UN) is all about industrial properties, like warehouses and logistics centres. Not retail directly, but providing support for the sector. It has a market value of $4.2 billion. In 2024, Granite reported an FFO per unit of $5.44, a nice increase of $0.47 from the previous year. The real estate stock’s focus on these kinds of properties puts it in a good position to benefit from the growth of online shopping.

Bottom line

As housing prices keep climbing across Canada, these REITs give investors a way to get involved in the real estate market’s growth. Each real estate stock focuses on different types of properties, from apartments to stores to warehouses. This lets investors choose what kind of real estate they want to be part of, depending on what they like and how much risk they’re comfortable with. But it’s always important to do your homework and look at things like how well the company is managed, where its properties are, and how stable its renters are before you invest.

So, the real estate market in Canada offers some interesting chances for investors through REITs. If you carefully pick REITs that have a solid base and good plans for growth, you might be able to benefit from the rising value of properties and the regular income these trusts offer. It’s a way to be part of the real estate boom without being a landlord yourself! Just remember to do your research and invest wisely.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Granite Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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