• August 27, 2017 at 4:14 am #11330
    D.V.
    Participant

    At a recent conference I attended in Toronto, the local news paper talks about falling property prices in Toronto (Financial Post, page FP9, Saturday, 26th August 2017). I quote from the article, “Toronto home prices are down nearly 19% from April peak and sales are down 40% lower in July, than a year earlier.
    What is the best way to make money in this situation, short of buying Canadian Real estate directly?
    Which Canadian banks are most exposed to the mortgage markets?
    Are there Collaterlised mortgage instruments that are available for swaps?
    This is a starting to feel like the US housing melt down circa 2008. I do not know much about the Canadian real estate market, but there is a good chance that other markets like Vancouver, would also be under a shadow. 2010-12 turned out a great opportunity to buy American real estate, this will be no different. Any insights, tips would be much appreciated.
    As I look out of my hotel window in Toronto, there are scores of multistory buildings I see that are empty, ready for sale (I suppose). The site is similar to track homes in the US, ready to be sold, without buyers circa 2008.

  • August 27, 2017 at 8:35 am #11331
    Cam Hui
    Keymaster

    It’s difficult to find decent publicly short plays on Canadian real estate, largely because most banks are lending with CMHC insurance. As CMHC is owned by the government, the banking system is partly insulated. Having said that, here are some suggestions:
    1) Short HCG, but that’s a well-known story
    2) Short Canadian MBS/long Canada bonds, but you need to read the MBS docs carefully to see what`s in the pool
    3) Short CADUSD

  • September 8, 2017 at 2:59 am #11432
    D.V.
    Participant

    Cam
    Thanks. Yes, too late to short HCG. #2 is difficult. #3 is a possibility, but CAD is already down against USD.

  • September 8, 2017 at 5:36 am #11433
    Cam Hui
    Keymaster

    Actually, CADUSD has been rallying quite hard because of the surprise Bank of Canada rate hike. For now, CADUSD is a mainly a USD weakness story. So be careful about shorting CAD.

  • September 8, 2017 at 4:27 pm #11438
    D.V.
    Participant

    Cam,
    No, not looking to short CAD (do not follow it much). Thanks for the tip. Eyeing Euro short (against US$) at some point in time, soon, for a trade.

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