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NEW HOUSING PRICE INDEX...6 _" K" O' d+ |# ]# w4 m3 f J
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( m2 l# w% n% h1 q% ^The New Housing Price Index, has just been released and it provides some very, l, K1 ^0 u6 r
interesting insights, not only into where the market has moved, but where it( t7 s# V9 d* K6 E3 i @, l
will be going.
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0 I: z2 f8 c* ~+ ~4 [$ EIt proved, once again, the value of looking at fundamentals behind a market.
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1 H+ ?8 s8 m& [8 p6 `) p' `The New Housing Price Index is compiled by Statistics Canada and is used by
7 v, w+ \" t8 e+ g1 g% Lsophisticated investors to see how much the market has moved, as well as an
) B8 i& d6 _- h7 N& Hindicator of where re-sale home prices will be moving in the coming six months.
) A! u4 d* y R! \We look at the ripple effect that new housing prices have on re-sale property; h% h4 F9 o+ Y U3 K. U' t
values and can extrapolate what direction re-sale prices will be moving and by
" t u/ ?, w8 y9 `how much.
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For instance, for the last three years, we have told investors to avoid Windsor,) _9 B! }: D) }3 O" _$ j+ @
Ontario as an investment area because the underlying fundamentals are not very" d& ]* L% d4 k
strong. This has been proven once again with the release of the latest
5 A/ R- B6 g$ q+ r, J5 kfindings. New Housing Prices have actually decreased by .5% during June 2005 -6 N0 s, _' K; a# p
June 2006 proving that fundamental investing works in helping you pick the best. v* X# h0 i9 O
markets and avoid the flat ones. This .5% decrease should have little impact) |9 K1 y+ Z. \+ B7 i
on average re-sale values in the Windsor region.
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2 N" h1 s& ]$ n8 Q% NTo contrast this, the fundamentals we discuss are so strong in Calgary that the
R. P; U5 K& j& {* K- W* x, C" Ymarket continues to be super heated. With close to 3,000 net new people into
2 `# _! e& v0 p/ n# b- nthe city every month, the property market just can't keep up. That is why we' Z! s, C+ e& Y
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). ' O# d4 ~& r! m' x
This is great news for the future of re-sale values in the city as these1 \3 i6 _0 L9 j# i$ ~
increases will continue to ripple out into the market for at least the next six
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Comparing these two regions is a great illustration of the value of not getting
7 }' A7 c( b: ^/ M8 Rcaught in the 'emotional guessing game' by just focusing on the underlying
, R r. W9 G9 l2 b5 [* U8 p0 Y- c" Pfundamentals. It is sad to see those people who said in the last 2 years that
( K- N+ v) F% V: Xthe Alberta real estate market was over and they were going to sit back and wait* N3 d# S* L1 G4 w$ e6 p
until it drops. Quite obviously, they have missed out on AMAZING gains, all
: E# m1 S( e9 i# Q& Gbecause they didn't follow fundamentals, they just led with their emotions.
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June8 B3 \; A D0 x$ A; A3 X
2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June
3 |6 S4 V4 B# t: k: @* x2006 New Housing Price Index for:
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+ O( \- v2 e! g( z' @. J* U# z9 ^/ zVancouver . . . . . . . . +5.2%9 o# d( b% Z* E, K, U3 P3 u; W
Saskatoon . . . . . . . . +8.5%
# G3 W; v) p( j, Z% Y6 z ILondon . . . . . . . . . . . +3.0%
& S/ R- E$ V) x1 x% SHamilton . . . . . . . . . . +4.9%
2 a$ g" G1 V6 u9 |9 Y$ R$ }St. Catharines - Niagara . . . . +4.9%
: w- T; |: i7 S- P* E8 QToronto and Oshawa . . . . . . . +3.2! U; q/ N3 }5 R; h4 s
Ottawa - Gatineau . . . . . . . . . +3.1%# N9 ]3 x* x \$ ?5 F4 L
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Fundamental investing ALWAYS makes you look like a genius - emotional investing+ b, G, Z; Q s2 v; g% u' [, S+ M
gives you quick highs, but also quick lows. Well done on your focus!
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/ P6 J' t' v( w" YAs the fundamentals have been showing all along, the Alberta market continues to" k$ s. i8 t- W
be strong, as in-migration and job creation continues to attract people from not
6 N2 N$ z2 B! V g% Z8 |3 P; xonly across Canada, but from around the world. Our average wages are
) g$ T- u" C' e7 |" Y2 K8 b1 ]7 Gincreasing, our population is increasing, our unemployment rate continues to. D- \5 t2 {1 ^/ l3 M$ h9 |0 W& I
drop and our GDP growth is slated to once again lead the country.
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) {3 T% }9 g n) yHere are some very interesting facts that are helping to support the strong
6 g$ r: o2 b8 X3 D6 i2 T" p0 Dfundamentals:0 u7 R& X* ^% x, A6 p
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1. The Conference Board of Canada is forecasting strong economic growth in
3 R. V/ s3 v* mCanada, with Alberta once again leading the way. In fact, the projected growth- k# F5 B& c0 @0 Q% d( g
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and* g& v) F& D- x7 E; s& u. u& Z( X
this is slated to occur even with the labour shortages we are witnessing.
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2 P c7 y0 m7 q/ ^2. People are discovering Canada as an investment center from all over the
- e C9 p% f" R$ vworld. Recently, there have been investors coming here from Asia, Australia,2 V8 u# E, e9 N* n
the US, UK and Europe. In fact, if you review the world's press you will see
& @) C: e; @% U5 v) D$ ]6 D+ m7 xthat Canada (with a focus on Alberta) is being discussed more frequently. * @$ l: q. M, e
. n! z: L* @8 ]3. Don Campbell has just returned from presenting our Canadian investment2 W* v7 z( C6 |) s l! @
atmosphere (including Why Alberta - Why Now") to a group of major investors in
% X# [' R( ]( h3 aDublin, Ireland, and the response was overwhelmingly positive. In fact, after1 z1 l& u! B, t9 b' H l- j& k
Don presented the economic facts, many of these investors (who could invest
: ~. q0 E' g3 Yanywhere in the world) have already booked their flights to here. Once again
X% `; P9 @ P4 A2 T3 Z( dproving that when the true numbers of our economy are presented (along with the
- t+ C3 X* j2 t( J' ipolitical stability of our country), there is no place in the world that can8 E. L( l) S7 m) M* B; X
beat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely- r6 K8 n. S; I" `+ E
a sign of strong long-term fundamentals. RBC has also been following the job
% m8 c/ g' `+ m% p" ~2 v0 \creation situation and here is what they are saying: (www.rbc.com/economics)+ [1 K- j: ~2 R
"After generating a substantial 96,700 jobs in May, the largest such gain since
0 \ ~4 k0 b# @$ G6 B2 j, Z3 HJanuary 2002, the economy lost a modest 4,600 jobs in June... ) S. [7 K- P! A0 n3 \4 x
, s; R8 L7 ~0 c; h: F) oStrength in the Canadian economy contributed to a gain of 215,600 jobs in the" ?- J( z4 `0 e; W, `
first half of 2006, a feat not matched since the second half of 2002. With the
1 p* X* P5 ]3 b- Deconomy widely expected to grow at a more moderate pace in the second half of
, v& n, @1 A0 \- B4 Pthe year on the back of slowing trade activity, this impressive showing may not* D* f/ k) D7 Q0 c
repeat itself. We expect that employment grew in July at a pace consistent with4 q: x! H# g8 O, a, R
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at" l6 O9 i; S# M+ P. S6 o# F8 Q; k9 @
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate+ X! ^/ F: }$ L. d. C W) S; ^0 ^1 t
of 6.1%." Overall very good news. Now the key is to ensure that the region in. A; _7 _" h, z) c# c
which you are investing is continuing to generate jobs and increasing incomes.
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In other words, it is a great time to be taking advantage of this strong% j% f6 Q8 a$ ]' k2 F. H3 P
economy, avoiding 'excuses' and to especially not listen to the uninformed
% @& |& q6 @8 D'dream stealers.' As long as you stick with your game plan, you continue to do
F' E7 q) Q5 A* y. l0 qyour due diligence, and you remove emotions from the equation, you will see the8 N* n2 g0 h7 h: ], I6 t* [
opportunities that are right in front of you, right here in Alberta. Let the" Y) E5 f# s) f7 ~, L% P2 q# M
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
4 v6 r' [( I$ m5 tand your financial freedom has surpassed even your wildest expectations.
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( H8 c( K: v; F0 T2 iCapital Gains Comparison.
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KPMG has recently released a comparison of the true Top Federal and Provincial* o9 w t8 Z4 ]+ x, L% f1 ?- {: w
Marginal Capital Gains Tax Rates per province. It is very interesting to see7 x0 F t* Y! ^) L. i% x5 |
how these will affect your exit strategy. Here are the numbers:% w+ n! q! U O8 g/ W% Q
1 r; F: ^( W. g# R; I+ jBC . . . . . . . . 21.9% ?6 T5 H+ Y& h0 F' [6 j
AB . . . . . . . . 19.5%
, I& |& Z$ g5 ~, h x' s9 a( E* Z) `SK . . . . . . . . 22.0%" ~" A2 e# J2 ?
MB . . . . . . . . 23.2%4 @. n' v+ n7 t c% ^
ON . . . . . . . . 23.2%
3 ?- g, s, g, q' U8 w4 OQC . . . . . . . . 24.1%) l# t( c+ l1 j3 {: d8 F
NB . . . . . . . . 23.4%; ?8 z6 R3 h# e. x- }/ I1 x
NS . . . . . . . . 24.1%
- t: |# L+ b, W. o, d5 KPE . . . . . . . . 23.7%( K- `# E( O- Y# {
NF . . . . . . . . 24.3%
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Lower capital gains tax increases investment and stimulates the long term
+ E$ K3 R1 x/ S; V) I; seconomy of the province. It also allows real estate investors to keep more of
- E! l7 W1 |$ m: ^5 a( E `their profits at exit time. Always a good number to pay attention to.- O. n7 ~ j F0 r7 W1 H, m3 n
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Overall, by staying focused for the next short period of time, you have the7 `* t i5 L) c5 h& R6 g
opportunity to create financial freedom of which others can only dream. Of
% r8 Z% A# w2 ?: g; Y* @# z6 ccourse, the key word is focus. And with an August line-up of 'Members Only'
- w; D3 Q O0 \8 X2 q- vevents like this, you can't help to become a real estate investment champion9 {" x$ r5 r9 T" f2 V
when you take action as a full REIN Member.1 M; |3 h' L* e' f: C
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the4 M+ d! k6 _! f6 @, I$ A- e
results in just a few short years. |
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发表于 2006-8-25 08:35
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