Canadian Money Forum banner

Shorting Toronto Real Estate

1760 Views 8 Replies 8 Participants Last post by  james4beach
I'm trying to come up with some plays to short Toronto real estate.
Home Capital is already on its death bed. Any other ideas?
Shorting Street Capital sounds tempting... The big 5 will probably come out of this surviving...
1 - 9 of 9 Posts
We all know the housing market is a bubble, but I do not think Trudeau will let this go down, considering elections are coming... I feel they may offer some stimulus to keep this going.. (maybe offer subsidies ?)

If you still want to short, know that it is certain but it will be a long wait.. if you can hold the position for that long..
I would think it would take some kind of shock that takes liquidity out of the system bringing everything down. Or some crazy Canadian or Ontario made policy that kills it directly or through the economy.

Otherwise I am with investorted on this one.
Trance.god Are there any home building stocks that can be shorted ?

investorted Trudeau is no match against market forces. The market is stronger then any man

New Dog like your thinking on this. I think the play is in the S&P when everything falls do to the fact puts are priced so low spy & spx which will allow the puts to explode higher. When looking @ individual stocks or ETFs nothing else have puts priced low enough to allow for the same type of explosion up wards as spy or the large stock indexes such as DIA
The stocks I'm aware of as proxies to the housing market are

any REIT, maybe XRE or ZRE

However I'm not sure which ones are most exposed to Ontario.
You could probably buy most Canadian stocks, when the housing market goes, it'll take a lot of other things with it. When people can't afford their homes, they cut back spending, when they lose their homes and their credit ratings, things get really ugly.

This could make the Great Depression look like a day at the spa. I wonder if we're on track for a 100 year cycle.
I think these companies are still going strong even though there may be some unwarranted lack of shareholder confidence. If they were to throw in the towel, there are many hungry players out there who will gladly take them over. For a bubble to burst, it comes with little to no warning. I think we've been talking bubbles long enough that the government is making sure it won't pop. Just look out west - market cooled down but I didn't hear a pop yet. Everything is possible.....but I personally think betting against the market is a risky move.
yes, the housing prices are cracking, and RE will correct. But I think you are too pessimistic. Shorting lenders isn't going to get you much, if anything.
A more subtle way to 'short' Canadian real estate would be to under-weight the bank sector in your Canadian stock investment. If there's a serious housing crash, all the banks will suffer due to escalating bankruptcies, credit contraction, falling collateral asset prices, and generally a poor lending environment. All lending will suffer.

This is how I'm playing it. I'm still long Canadian equities, but instead of the 34% financial sector exposure, I only have 17% in Canadian banks. About as low as I can go within the realm of normal. I'm not explicitly shorting anything, just reducing long exposure.

If you think a housing slowdown is under way, it would be bad to be overweight the financial sector. For example XDV is 58% financials and RBC Dividend Fund is 40% financials.
1 - 9 of 9 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.