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NEW HOUSING PRICE INDEX...
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The New Housing Price Index, has just been released and it provides some very G- M0 h1 P' r/ d
interesting insights, not only into where the market has moved, but where it7 v2 y9 Z4 X% w$ I7 f6 E
will be going.
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It proved, once again, the value of looking at fundamentals behind a market.
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! L4 E" p1 J( D! vThe New Housing Price Index is compiled by Statistics Canada and is used by
- e) G9 o/ U! \7 b+ `9 A9 n+ Ksophisticated investors to see how much the market has moved, as well as an
4 I% X" Z( G) D. Windicator of where re-sale home prices will be moving in the coming six months.
! u" N3 m+ _* l5 z+ d+ \8 rWe look at the ripple effect that new housing prices have on re-sale property1 i; M1 _2 s- t) a( @- `& q* S' {
values and can extrapolate what direction re-sale prices will be moving and by- e% l; p$ w( d" e
how much.9 [, G) T1 |6 P; [4 b% K
+ d! h. b6 N1 t+ H) Q* y) l* m5 CFor instance, for the last three years, we have told investors to avoid Windsor,. c# D+ x7 E1 f/ K" J
Ontario as an investment area because the underlying fundamentals are not very$ ], ]7 Z9 `. ~4 ]
strong. This has been proven once again with the release of the latest5 o# _8 m6 t3 k2 z0 W
findings. New Housing Prices have actually decreased by .5% during June 2005 -
+ L( F; x1 ^* Y y2 [1 O5 T# pJune 2006 proving that fundamental investing works in helping you pick the best) f: ?: l0 t! n0 f/ l, S/ ^
markets and avoid the flat ones. This .5% decrease should have little impact1 ~( }9 ]7 z& O8 [" K5 E) L
on average re-sale values in the Windsor region., ?1 n' ^8 d6 m Q
$ O$ H0 K2 y5 |8 k: |To contrast this, the fundamentals we discuss are so strong in Calgary that the: G. m8 J$ d1 \( G
market continues to be super heated. With close to 3,000 net new people into) C! d' i% c# m8 D
the city every month, the property market just can't keep up. That is why we
9 y& Q% `) c' j: O! ~4 ^* Csaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). - f$ Y- A% D$ Y/ Y) Y
This is great news for the future of re-sale values in the city as these0 {7 r W. @9 ^
increases will continue to ripple out into the market for at least the next six3 k" h/ J0 r! ^" f9 N
months.
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Comparing these two regions is a great illustration of the value of not getting
$ X F0 Y9 k# h3 o! j" ycaught in the 'emotional guessing game' by just focusing on the underlying* I0 A: V6 G3 F$ x! M! q
fundamentals. It is sad to see those people who said in the last 2 years that
" P, X. I: [" d9 Z6 Athe Alberta real estate market was over and they were going to sit back and wait
: d# j) S( `9 y) w3 J. Ountil it drops. Quite obviously, they have missed out on AMAZING gains, all! V# _) g5 F$ V! O! j
because they didn't follow fundamentals, they just led with their emotions.4 q) S% l' ^$ j) t& X$ K5 s
! G V. t" t! D1 \By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
( Y1 |# P1 ]) p% ?2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June
+ |: P, x# ?3 ?% e }2006 New Housing Price Index for:. b5 u; M7 F+ e b7 l3 m* s' A
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Vancouver . . . . . . . . +5.2%
* X# p4 t8 g. i, \Saskatoon . . . . . . . . +8.5%
5 O1 Y) k* }+ I& b; V; I% M+ ]London . . . . . . . . . . . +3.0%
; q M9 n- d+ c4 [" w' ~Hamilton . . . . . . . . . . +4.9%) e2 X, B, k& _5 ~4 B: K& [( A
St. Catharines - Niagara . . . . +4.9%
, M0 B8 }. V) A% W( ~, WToronto and Oshawa . . . . . . . +3.26 f6 I0 B( h; G/ x, J+ b% _) O% i
Ottawa - Gatineau . . . . . . . . . +3.1%
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Fundamental investing ALWAYS makes you look like a genius - emotional investing8 B* \0 c9 Y: M- ]2 _
gives you quick highs, but also quick lows. Well done on your focus!# ^4 b0 B, k8 d. n2 z0 y# c
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As the fundamentals have been showing all along, the Alberta market continues to4 p" t" }: M8 Y2 D1 h
be strong, as in-migration and job creation continues to attract people from not
* I% L! h Z8 h' v+ D' Aonly across Canada, but from around the world. Our average wages are* c2 d; |5 `% z. _9 A" ^2 y, n
increasing, our population is increasing, our unemployment rate continues to! a9 |$ ]- U6 R2 K
drop and our GDP growth is slated to once again lead the country.
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A; @* C S) q' dHere are some very interesting facts that are helping to support the strong
+ c' U& T, U% l5 ]* W* cfundamentals:
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5 E2 J% x; k4 D' i5 S% ^1. The Conference Board of Canada is forecasting strong economic growth in; {( n% _* O9 J% a" x
Canada, with Alberta once again leading the way. In fact, the projected growth& w: N6 A6 {9 j: |$ y9 @7 E" Y: Z
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
1 [& V$ { Z& E+ hthis is slated to occur even with the labour shortages we are witnessing.$ `7 J# c3 p5 w8 p
# w( ^( v! L# \8 _9 b" l2. People are discovering Canada as an investment center from all over the6 _2 R( t' [# h. X" h: J& q) s
world. Recently, there have been investors coming here from Asia, Australia,/ ?9 B! A8 z3 Q7 O, B$ j4 N. L/ h
the US, UK and Europe. In fact, if you review the world's press you will see; L* N7 R0 n5 P6 T
that Canada (with a focus on Alberta) is being discussed more frequently.
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4 ~5 n% J1 y7 K- }. m9 q' u+ a: M* d, J3. Don Campbell has just returned from presenting our Canadian investment+ g6 _1 E: O( X# P+ ~# D3 m0 Z+ e
atmosphere (including Why Alberta - Why Now") to a group of major investors in4 t# s+ _ i6 H0 i w# l \
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
6 Y! W- c2 j* F$ q( L! A! jDon presented the economic facts, many of these investors (who could invest* P' H7 }& Y0 ?9 v/ a, T9 I
anywhere in the world) have already booked their flights to here. Once again
3 ?5 u Q6 ]* G6 i: E: c' _proving that when the true numbers of our economy are presented (along with the
; k5 q. N$ }/ U1 a; dpolitical stability of our country), there is no place in the world that can- W) }$ l, Z. c3 e& l* a* H! a
beat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely. i9 ~& S4 M3 c% g. @8 {: B+ t q
a sign of strong long-term fundamentals. RBC has also been following the job
7 e" R: Z! }, {# D* j' l9 mcreation situation and here is what they are saying: (www.rbc.com/economics)
6 K1 z# j& U/ {$ Y7 \, F- e"After generating a substantial 96,700 jobs in May, the largest such gain since4 B8 h( q/ T4 K! P: F% K
January 2002, the economy lost a modest 4,600 jobs in June... / O4 [- P( V+ V7 `/ H: B. d; `
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the
+ q6 J6 f7 s2 h7 Xfirst half of 2006, a feat not matched since the second half of 2002. With the; D$ |' P) r; j( j# \
economy widely expected to grow at a more moderate pace in the second half of
% p- P( Q; s4 p+ u, Y {5 F- _7 z0 lthe year on the back of slowing trade activity, this impressive showing may not! @2 n9 X* m+ n2 v) u
repeat itself. We expect that employment grew in July at a pace consistent with
4 W2 }+ K; d+ r, K' U Eits recent trend of 24,000 jobs a month. Assuming that the labour force grew at
7 r2 i; [4 T4 R+ J; ^its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate* h2 H1 }. y, a( e9 k
of 6.1%." Overall very good news. Now the key is to ensure that the region in/ [! X# t' O' H
which you are investing is continuing to generate jobs and increasing incomes.9 Z; [* M4 {# n. U) n7 ~+ e+ R8 T
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2 T" b# V7 Y/ O8 |In other words, it is a great time to be taking advantage of this strong
( y! L, h4 q1 [3 _& Peconomy, avoiding 'excuses' and to especially not listen to the uninformed
/ Z, p% h0 g2 B'dream stealers.' As long as you stick with your game plan, you continue to do
2 A$ ?, l: h% p7 Iyour due diligence, and you remove emotions from the equation, you will see the
( t" @* u7 M, p; s; S( d, Sopportunities that are right in front of you, right here in Alberta. Let the M4 K3 p; q6 X+ m! A. X: h1 Z
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared4 r% r" [0 Q1 U5 T
and your financial freedom has surpassed even your wildest expectations., t9 I' q/ u# j7 f
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* l1 _. c/ X- R9 n9 JCapital Gains Comparison.
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KPMG has recently released a comparison of the true Top Federal and Provincial
7 C: r) R% x" x2 {, N! F* |Marginal Capital Gains Tax Rates per province. It is very interesting to see" I0 ^$ F$ s) z9 U) o7 D5 v
how these will affect your exit strategy. Here are the numbers: f& i+ C4 X- Z* b$ I) u1 \
% M4 V0 g, A6 K2 T8 _) K4 ?# r3 o* iBC . . . . . . . . 21.9%
9 f6 Z& D5 y, c4 {( G/ X) qAB . . . . . . . . 19.5%
8 e" q' ^/ h7 J7 n( r( }% V2 vSK . . . . . . . . 22.0%
- e" P- L( ?, i& V0 P) TMB . . . . . . . . 23.2% @- z! _9 ] s6 R
ON . . . . . . . . 23.2%
% M5 C8 _. I" ]6 i6 V7 R7 V% _QC . . . . . . . . 24.1%
4 z5 Y) l1 j& i9 ]NB . . . . . . . . 23.4%9 G% R( l5 U3 p9 w
NS . . . . . . . . 24.1%
% h4 g+ Z: V* D; \PE . . . . . . . . 23.7%
# X9 g2 m( R% B# rNF . . . . . . . . 24.3%
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Lower capital gains tax increases investment and stimulates the long term# g" p3 C9 x! F+ C" U; h+ _' p4 g
economy of the province. It also allows real estate investors to keep more of# n. X. `. @/ a' W1 G6 `$ j; K% t
their profits at exit time. Always a good number to pay attention to.
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Overall, by staying focused for the next short period of time, you have the" a5 K* c) e5 [! _8 n
opportunity to create financial freedom of which others can only dream. Of
9 _! d7 g- f0 n, W; T8 T @* Ncourse, the key word is focus. And with an August line-up of 'Members Only'
! N+ C3 r! {' l a _4 h" J4 y2 z) Revents like this, you can't help to become a real estate investment champion: @2 _% \) f& p' d0 b2 |' J
when you take action as a full REIN Member.8 y2 q' w- E' o$ y+ w1 E
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the
* Y! ~, m" ^: x9 Cresults in just a few short years. |
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发表于 2006-8-25 08:35
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