Brookfield Real Estate Services says its cash flow from operations for the past three and six months, ended June 30, 2013, was $6.6 million and $12.1 million, respectively.
That compares to $7.4 million and $12.9 million for the same period in 2012. The company adds the drop is the result of a $0.2 million decrease in royalties from lower market activity, along with a $0.6 million rise in administrative expenses.
And, on a rolling twelve-month basis, Brookfield’s Canadian market transactional dollar volume of $160.8 billion fell by 5.9%; there was a 1.3% increase in selling price, and home sale activity plummeted by 7.1%.
Brookfield’s revenue is fixed in nature, says the company, but it still faces challenges. Its earnings structure protects against the impact of revenue declines, but also reduces the degree to which the business can benefit from rapid market expansion.
CEO Phil Soper says, “We witnessed the continuation of a…cyclical market correction in the second quarter of 2013. The economy improved in Canada and in the U.S., but monetary policymakers on both sides of the border are [making sure they] ensure the sustainability of the rebound.”
He adds, “While we’ve seen modest price appreciation, homebuyers have been taking a slightly cautious stance as evidenced by lower sales volumes in many regions across the country for the quarter.”
What’s more, “Consumer confidence levels haven’t completely rebounded.” Soper says the economy will improve slowly, and will help the market return to historical sales volume and house price appreciation averages though 2014.
He adds, “The condominium sector may see some softness for the near term as the market absorbs new supply [but] changes to demography, city planning and customer preferences all presage positive growth for this category.”
Read:
Condo demand mixed in big cities: BMO
Signs of life in U.S. real estate