Those looking to go home shopping in Canada may be in for some good news, as Canadian home prices are set to rise slower than overall inflation this year. But the news proved less than welcome for the iShares TSX 60 ETF (TSE:XIU) as investors sent it down fractionally in Friday morning’s trading.
In fact, reports note, the trade war currently in progress with the United States has sent transaction volumes into open decline, with Canadians likely figuring the house they have no will probably be good enough for the foreseeable future. Throw in some uncertainty—both foreign and domestic—and a Canadian economy that was already softening is starting to buckle still further.
Worse, with new Prime Minister Mark Carney poised to set up a set of new trade actions—and Ontario premier Doug Ford already vowing to “…inflict as much pain as possible on the American people,” reports noted—the uncertainty that had already set up shop in the Canadian economy should only amplify from there. Despite 225 basis points’ worth of rate cutting from the Bank of Canada, home sales are down the lowest they have been in three years.
Vacation Properties For Sale, Cheap!
Meanwhile, there is an odd trend in the making, as Canadians seem to be selling off vacation properties at a solid clip. One report noted that there is a rise in sales from Canadians selling property in Florida amid rising homeowners’ insurance costs. Which is not surprising, given the growing hurricane counts and damages accordingly hitting in that region.
But it turns out Canadians are also selling vacation properties elsewhere; another report noted an “uptick in listings” in Ellicottville, New York. This seems more immediately connected to the trade war than the Florida sales, as there have not really been substantial price hikes on insurance in New York ski country that could be immediately spotted.
Is the iShares S&P / TSX 60 Index ETF a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:XIU based on 53 Buys, six Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 16.47% rally in its share price over the past year, the average XIU price target of C$43.80 per share implies 16.07% upside potential.
