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NEW HOUSING PRICE INDEX...
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4 H8 a7 k& m2 [The New Housing Price Index, has just been released and it provides some very: H7 M0 }5 l7 \& F, m
interesting insights, not only into where the market has moved, but where it1 Y7 P+ Q8 E7 a0 y& z
will be going.
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It proved, once again, the value of looking at fundamentals behind a market.: i# ?* \5 r; F
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The New Housing Price Index is compiled by Statistics Canada and is used by
$ v2 z0 S7 D; m3 _% zsophisticated investors to see how much the market has moved, as well as an; [( P7 t; ~" s9 L2 X) E P
indicator of where re-sale home prices will be moving in the coming six months. + i( ]% W3 R, C5 R
We look at the ripple effect that new housing prices have on re-sale property
& r c: l- |% |; v! jvalues and can extrapolate what direction re-sale prices will be moving and by6 H2 z: H- x( V, W) C
how much.0 k3 K' S0 S) t) q' Q
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For instance, for the last three years, we have told investors to avoid Windsor,
( `. b! D( Z5 u: S, mOntario as an investment area because the underlying fundamentals are not very" Y7 S* F+ g A V7 \
strong. This has been proven once again with the release of the latest/ O9 k/ `& v% J* r* [" K$ ^
findings. New Housing Prices have actually decreased by .5% during June 2005 -% O S: {4 S- r* q' v
June 2006 proving that fundamental investing works in helping you pick the best5 l' y E* A% x" H9 `
markets and avoid the flat ones. This .5% decrease should have little impact9 y- u, d+ x6 k) j; ?* D
on average re-sale values in the Windsor region.0 c9 I- }0 p' \, d9 @. t
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To contrast this, the fundamentals we discuss are so strong in Calgary that the
$ {/ ^% E8 P4 smarket continues to be super heated. With close to 3,000 net new people into# f# L+ c, [2 f% X
the city every month, the property market just can't keep up. That is why we
# B8 h# r- _0 O9 Q, r5 Bsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
9 F) Z4 ^+ T2 t( m |* j) c( \This is great news for the future of re-sale values in the city as these) ]3 S4 x! e. A$ c* f: f' L9 G
increases will continue to ripple out into the market for at least the next six
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/ ^% b% e% k- p6 F! _, M& kComparing these two regions is a great illustration of the value of not getting& ]5 Z. N/ D' b' S
caught in the 'emotional guessing game' by just focusing on the underlying
: R) v; G5 P5 Nfundamentals. It is sad to see those people who said in the last 2 years that
" I% H6 s5 X I8 }the Alberta real estate market was over and they were going to sit back and wait" H/ O. D8 X2 v7 D& R c
until it drops. Quite obviously, they have missed out on AMAZING gains, all
) u' M/ T5 I, {because they didn't follow fundamentals, they just led with their emotions.3 d% g6 p- j- X2 e' @9 ~0 e# l
# Y6 W6 x0 z/ S/ y* ~4 E( c/ b+ ~By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June0 W7 ~+ o) `/ |( x, y- X6 r# x
2005 to June 2006), also great news.
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4 R& l# |, x Z" m: ?% xBy comparison across the country, these are the numbers for June 2005 - June7 ~" u! y" S1 s- J8 {
2006 New Housing Price Index for:
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0 J9 ~9 [& C# ^; a9 z* n! eVancouver . . . . . . . . +5.2% e& t3 r. Z8 I& |5 e" s3 J+ L
Saskatoon . . . . . . . . +8.5%
5 H3 U: d6 |! u3 A; f- B' mLondon . . . . . . . . . . . +3.0%
1 u* `. [' g) o* u/ o: O$ sHamilton . . . . . . . . . . +4.9%7 ^( V) _4 H$ f8 R F1 J7 S( |* q- } H
St. Catharines - Niagara . . . . +4.9%0 i5 I% f# s9 K( _: [3 y) ^8 x
Toronto and Oshawa . . . . . . . +3.2
; _8 _6 @8 X8 E9 FOttawa - Gatineau . . . . . . . . . +3.1%
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$ g1 B! O6 C8 S* SFundamental investing ALWAYS makes you look like a genius - emotional investing
, _* q& z! G' H3 D+ X7 ~( {gives you quick highs, but also quick lows. Well done on your focus!! Y' t+ `' Y6 n# ~3 u; ^/ P2 A
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As the fundamentals have been showing all along, the Alberta market continues to; }4 ?! k- f1 a( d/ \3 e7 o+ [
be strong, as in-migration and job creation continues to attract people from not8 ?! D [8 Z/ {; F
only across Canada, but from around the world. Our average wages are: t! h7 G! N3 U" x; a ?
increasing, our population is increasing, our unemployment rate continues to
. H7 x3 I5 n8 B2 C. F" K5 ndrop and our GDP growth is slated to once again lead the country.
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; G' C' Z- Q( z+ L$ bHere are some very interesting facts that are helping to support the strong
1 x/ i' D5 \' s7 H5 ]2 mfundamentals:
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5 h# M+ ~( Q$ \1. The Conference Board of Canada is forecasting strong economic growth in+ ]. t4 s9 @" C8 h9 l
Canada, with Alberta once again leading the way. In fact, the projected growth
- l! f5 t+ r1 w) M% n% Gfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
* k$ L; G' _8 O% q6 w% q7 @this is slated to occur even with the labour shortages we are witnessing.
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2. People are discovering Canada as an investment center from all over the8 i+ P6 j/ N5 r7 C; u+ g
world. Recently, there have been investors coming here from Asia, Australia,- ]8 ^# ~6 c8 L5 `. s
the US, UK and Europe. In fact, if you review the world's press you will see8 W- J) d& u! H
that Canada (with a focus on Alberta) is being discussed more frequently. " P' e( A- g' L/ J/ v9 K% f8 T
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3. Don Campbell has just returned from presenting our Canadian investment
) o$ G6 C3 p$ O4 N. F# y Gatmosphere (including Why Alberta - Why Now") to a group of major investors in
; n! B! J' ?; p- \Dublin, Ireland, and the response was overwhelmingly positive. In fact, after i' [3 v9 l) [1 w
Don presented the economic facts, many of these investors (who could invest
+ f4 m9 P& \4 A# wanywhere in the world) have already booked their flights to here. Once again( d2 ?( S6 P2 T0 I; y# {
proving that when the true numbers of our economy are presented (along with the
7 V% W5 N! R8 h; w# `political stability of our country), there is no place in the world that can
, ?# h) \; J0 E" Pbeat it for long term investment.
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n1 [1 a7 W! ]) W7 o4. Job creation continues to be strong (with a small lull in June); definitely
3 J$ j, B: U% V9 [a sign of strong long-term fundamentals. RBC has also been following the job' `8 l% I- ?1 t8 W
creation situation and here is what they are saying: (www.rbc.com/economics)
! x; t0 w0 s" K6 X8 t"After generating a substantial 96,700 jobs in May, the largest such gain since
6 j- l6 V" r( x, e4 CJanuary 2002, the economy lost a modest 4,600 jobs in June...
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the
3 f; @, O+ P1 {first half of 2006, a feat not matched since the second half of 2002. With the
3 U/ V- Y" t9 L9 `economy widely expected to grow at a more moderate pace in the second half of
6 U8 z5 x( q. _6 \8 O4 n ^, l, Hthe year on the back of slowing trade activity, this impressive showing may not
( A" F! Q5 p2 I) |% grepeat itself. We expect that employment grew in July at a pace consistent with: O5 R& o- Z1 j7 _3 Y% i! n/ W m
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
3 I" f: K( W$ ^8 Q$ K( V5 eits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate5 ?+ ` f# ?( s8 o. d0 P& b
of 6.1%." Overall very good news. Now the key is to ensure that the region in7 |( ^/ {) E$ ^, V I. Q! ?
which you are investing is continuing to generate jobs and increasing incomes.- j3 l9 t, j- p y
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6 T; M( n0 F. n) KIn other words, it is a great time to be taking advantage of this strong4 r# d1 W% p( f9 o8 E
economy, avoiding 'excuses' and to especially not listen to the uninformed
4 h0 J" _! d' u( R+ W4 g% G/ E'dream stealers.' As long as you stick with your game plan, you continue to do
9 J6 g9 w3 S& R. K6 ?your due diligence, and you remove emotions from the equation, you will see the
& e% h! O, l( F$ fopportunities that are right in front of you, right here in Alberta. Let the2 z* ^1 j3 G; F* o6 c1 Z5 ]8 Q5 Y* l L
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared4 a: ^- I+ e" f2 C2 G
and your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison.2 V/ a1 u. N: x
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KPMG has recently released a comparison of the true Top Federal and Provincial$ ]7 N; k0 h) j7 u% ~
Marginal Capital Gains Tax Rates per province. It is very interesting to see
! ]5 G7 `# o! B3 C! r( Rhow these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%
2 a* X% f. \ u+ q" O$ h- RAB . . . . . . . . 19.5%
D V! w5 i- T1 `2 GSK . . . . . . . . 22.0%
. k o* C, d: g, F4 zMB . . . . . . . . 23.2%
+ D; q$ w- I' m4 e/ ~ON . . . . . . . . 23.2%* K O% I0 U) b+ |# Q! Z! s; `
QC . . . . . . . . 24.1%
! Q7 f4 z: v: t7 a1 e+ j! ANB . . . . . . . . 23.4%0 B9 K' P# I$ \' t% {# O4 i
NS . . . . . . . . 24.1%( u9 i/ p4 a4 y: H/ W1 S0 q/ L* O
PE . . . . . . . . 23.7%. S4 t1 R! N' b* o; E7 D
NF . . . . . . . . 24.3%
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! @0 v) E- z2 t: y8 ELower capital gains tax increases investment and stimulates the long term
5 J6 P- {% n% p9 O- ^economy of the province. It also allows real estate investors to keep more of: p+ n2 s$ X- n9 M
their profits at exit time. Always a good number to pay attention to.. L: {, _$ P3 E8 B
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5 m# h" `6 o6 p, ROverall, by staying focused for the next short period of time, you have the
1 D& E1 u9 z G6 K$ N& R) F4 ropportunity to create financial freedom of which others can only dream. Of8 y( P9 ~* y( x' t* X* P, a
course, the key word is focus. And with an August line-up of 'Members Only'
$ h5 t4 w+ i- d& e. Kevents like this, you can't help to become a real estate investment champion. ~1 Z }8 p* [+ b/ c# b: s
when you take action as a full REIN Member.
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the
! q' u1 h6 N7 z; q& E& y9 ?results in just a few short years. |
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发表于 2006-8-25 08:35
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