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s we head into 2025, many Canadian real estate stocks are trading at undervalued prices, offering a prime opportunity for long-term investors to buy and hold. The sector's performance is heavily influenced by interest rates, which have been on the decline due to recent rate cuts by the Bank of Canada. This trend may continue, with economists predicting two more interest rate cuts this year. However, the uncertainty surrounding tariffs and trade wars has created a volatile environment that makes it challenging to predict outcomes.

    While real estate stocks are less directly impacted than sectors like aluminum or lumber, they're not immune to the economic uncertainty. The potential for further interest rate cuts or increases in response to trade developments could continue to affect share prices and capital decisions, slowing growth potential for top Canadian REITs. Despite this, savvy investors can use this environment to buy undervalued real estate stocks while exercising caution due to the escalating trade war's potential impact on investments.

    In fact, some of the best Canadian real estate stocks are trading at attractive prices, making them worth considering for long-term portfolios. However, it's essential to carefully evaluate any investment in light of the current economic uncertainty and its potential effects on the sector.