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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
+ o2 k+ Y5 L: |9 a9 c) n; ?interesting insights, not only into where the market has moved, but where it
]8 B, y2 ?. R* ~* ^* d' a) kwill be going.
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It proved, once again, the value of looking at fundamentals behind a market.4 P) R0 y! d+ j3 p. h% L' }
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The New Housing Price Index is compiled by Statistics Canada and is used by$ g# c( z) C7 G- R2 m/ c& i% r
sophisticated investors to see how much the market has moved, as well as an) N% t! q. B" E
indicator of where re-sale home prices will be moving in the coming six months. 1 R7 K7 f! R; ?3 t% p9 i) ?# {
We look at the ripple effect that new housing prices have on re-sale property
1 {) E8 ~2 f7 p( u0 d- Z$ Bvalues and can extrapolate what direction re-sale prices will be moving and by# P! @4 }9 | X0 ?0 o
how much.6 o: ?! ^) T# o4 o3 h, K
" B T( Z) X% b$ G2 }For instance, for the last three years, we have told investors to avoid Windsor,* _4 s- ^& [- K1 P1 O
Ontario as an investment area because the underlying fundamentals are not very
4 O, a2 g# i+ c' _strong. This has been proven once again with the release of the latest+ V" Z3 h5 z2 F9 t8 @9 o
findings. New Housing Prices have actually decreased by .5% during June 2005 -$ B! e( C' D1 ~9 b
June 2006 proving that fundamental investing works in helping you pick the best: V. x+ U3 R9 e; Z/ M8 [, Y
markets and avoid the flat ones. This .5% decrease should have little impact
# d; V; h0 Y- m+ _on average re-sale values in the Windsor region.
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3 d- K% z2 ?6 `5 ATo contrast this, the fundamentals we discuss are so strong in Calgary that the% z, @$ ]4 F# i/ N, E* S/ K5 ]
market continues to be super heated. With close to 3,000 net new people into
$ h7 |' E; {' f1 E$ a" R$ `9 J, _the city every month, the property market just can't keep up. That is why we& A1 |; P" ~# {0 u/ d- [
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). 9 a1 \# r6 T8 Y; G- ~( W! H' y
This is great news for the future of re-sale values in the city as these* K2 t; n! k; ^9 _" G2 K
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+ d8 n) F9 |" G# b. M4 Z
caught in the 'emotional guessing game' by just focusing on the underlying
7 v5 N( z' E7 v3 z, Vfundamentals. It is sad to see those people who said in the last 2 years that
& a& Y6 t+ `8 b/ tthe Alberta real estate market was over and they were going to sit back and wait
! m; b: E% U' euntil it drops. Quite obviously, they have missed out on AMAZING gains, all
8 \& V; Z: R6 X; q* M. @) Y# Tbecause they didn't follow fundamentals, they just led with their emotions. ~8 d* l$ N5 [2 A+ g; ]% j0 `
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June* W/ a! J4 @1 J' x! t, {- a& d0 y
2005 to June 2006), also great news.
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H% e0 V6 T# g! U3 DBy comparison across the country, these are the numbers for June 2005 - June
7 b- b+ T: y7 o; A3 }8 m( \3 t& t2006 New Housing Price Index for:7 p6 a/ Q" W0 p- F5 U3 R8 ?4 A
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Vancouver . . . . . . . . +5.2%6 X% a( l( }- t( k
Saskatoon . . . . . . . . +8.5%" s0 Q9 U3 o4 ~
London . . . . . . . . . . . +3.0%; c2 U- A0 A. ], e' e
Hamilton . . . . . . . . . . +4.9%
D. i/ `# U' k: ^3 s) dSt. Catharines - Niagara . . . . +4.9%
; R+ i o2 }! B9 z7 eToronto and Oshawa . . . . . . . +3.2. b5 _: K: d" V9 {& J- N3 |; d2 n2 I$ I
Ottawa - Gatineau . . . . . . . . . +3.1%/ x3 b8 S# d( L k, u- ^6 g
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Fundamental investing ALWAYS makes you look like a genius - emotional investing
2 G! \+ z% E/ P6 U! O5 Vgives you quick highs, but also quick lows. Well done on your focus!
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As the fundamentals have been showing all along, the Alberta market continues to
% v/ Z& y. X" v9 E+ [1 _be strong, as in-migration and job creation continues to attract people from not, t4 Q* j- L6 I/ k7 a5 ^
only across Canada, but from around the world. Our average wages are
- W* c, p' Y: [( R$ U7 |7 jincreasing, our population is increasing, our unemployment rate continues to
3 ]0 M$ q9 { P6 c, d! qdrop and our GDP growth is slated to once again lead the country.9 B' l+ s1 C% g$ m0 Y, D/ |7 ^% V+ y4 n/ {
( G* G: l0 J: S' _: p: yHere are some very interesting facts that are helping to support the strong! g" ], x$ U0 R5 D) r/ C2 f. a; f
fundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in, w" P5 l1 U1 j
Canada, with Alberta once again leading the way. In fact, the projected growth
/ C( V: Y! i. V- g5 T2 P0 N9 @2 qfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and0 R6 i7 w% h0 m& Z' K' z+ h# l
this is slated to occur even with the labour shortages we are witnessing.9 T4 Z8 T. G0 A, M
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2. People are discovering Canada as an investment center from all over the# [' O8 B; _; }% X0 o) _ V: l
world. Recently, there have been investors coming here from Asia, Australia,
3 `- E0 S1 P- Z1 _- f9 o7 l/ v% m7 Q$ Ethe US, UK and Europe. In fact, if you review the world's press you will see
3 g+ v, X, ^/ w' Gthat Canada (with a focus on Alberta) is being discussed more frequently.
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3. Don Campbell has just returned from presenting our Canadian investment
; p. w7 S+ n/ f1 r3 l+ \atmosphere (including Why Alberta - Why Now") to a group of major investors in
: _! G0 Q. I& S! p4 R. mDublin, Ireland, and the response was overwhelmingly positive. In fact, after3 _" k1 q9 h) C/ r" ^
Don presented the economic facts, many of these investors (who could invest
, C; f G. h, p. Z m1 z3 Canywhere in the world) have already booked their flights to here. Once again
+ @' t% @! {5 W0 g! x- r9 N5 N% D( E( Hproving that when the true numbers of our economy are presented (along with the
z5 o9 e0 ]! spolitical stability of our country), there is no place in the world that can
* u$ a4 c' F f; N" L, Z lbeat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely
8 _4 K* P% H; B1 i8 b( O' X! C( r x0 ^a sign of strong long-term fundamentals. RBC has also been following the job
+ ^% i5 e. W! }" \' C& l1 H0 H. Wcreation situation and here is what they are saying: (www.rbc.com/economics) E( X. ?& u; _" Y s: F( \8 L6 G
"After generating a substantial 96,700 jobs in May, the largest such gain since$ _3 `- ~; I1 U, Z8 G
January 2002, the economy lost a modest 4,600 jobs in June... * n7 s$ k1 Z6 Z; `* r9 \& [ z
3 U4 k) _* P7 y2 K# f- c( YStrength in the Canadian economy contributed to a gain of 215,600 jobs in the4 P- v) ]! v, z3 @# }' F1 M$ [0 E a
first half of 2006, a feat not matched since the second half of 2002. With the
; G; x; d1 G2 g$ Xeconomy widely expected to grow at a more moderate pace in the second half of
9 D1 z7 P- `- o) Ethe year on the back of slowing trade activity, this impressive showing may not
* N' l# f8 Y& s/ R; M D! o7 {repeat itself. We expect that employment grew in July at a pace consistent with/ _( s% |$ b' ^9 b
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
1 {/ y# I7 \2 r, _1 I- Vits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate1 C9 s' U# o4 W1 J$ }
of 6.1%." Overall very good news. Now the key is to ensure that the region in; _$ Z# _, c3 U: V. I
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
! w' F+ f+ P5 D$ |economy, avoiding 'excuses' and to especially not listen to the uninformed+ Y5 F% T4 @6 w$ s( Q
'dream stealers.' As long as you stick with your game plan, you continue to do
. ~3 Y3 l/ z; F( ?* {' Iyour due diligence, and you remove emotions from the equation, you will see the
0 x# C- i( a Yopportunities that are right in front of you, right here in Alberta. Let the
9 \5 J Z, t- y: {'dream stealers' call you 'lucky' 5 years from now as your net worth has soared; ?' r4 S2 P8 o' s$ P! N1 z5 _
and your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison.
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; j7 h1 [# ^0 z6 _- `KPMG has recently released a comparison of the true Top Federal and Provincial
6 j2 x5 y7 z& lMarginal Capital Gains Tax Rates per province. It is very interesting to see
# [2 V. [0 d) K t3 F# R" Ehow these will affect your exit strategy. Here are the numbers:2 R) R# s. y9 x) r3 \" a, Z
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BC . . . . . . . . 21.9%) l0 [% N) W4 |
AB . . . . . . . . 19.5%
1 Y P) I: w. `- a1 KSK . . . . . . . . 22.0%& x( c" q/ L% T5 o/ D6 ?& L! n3 S
MB . . . . . . . . 23.2%4 `. O) T/ ?; } L6 p/ `+ k
ON . . . . . . . . 23.2%
" n0 _% k" A/ ?. f2 C8 \0 \QC . . . . . . . . 24.1%
! }& [/ g2 g' v+ ~' E4 D/ i( `0 p. JNB . . . . . . . . 23.4%
6 Y9 ^9 h/ K; x" C, r8 e0 O8 [NS . . . . . . . . 24.1%+ ~; w# a9 p& {. \. ]: H0 j0 [9 x
PE . . . . . . . . 23.7%
0 r- a3 h% ?5 xNF . . . . . . . . 24.3%
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6 p5 w# C0 y5 j }Lower capital gains tax increases investment and stimulates the long term% z% A* @& o& V; [
economy of the province. It also allows real estate investors to keep more of
- u8 J; _( B" b8 Xtheir profits at exit time. Always a good number to pay attention to.( a8 y' E- f2 o# T& J4 A/ S! {
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Overall, by staying focused for the next short period of time, you have the
, U2 ~3 g& k; f+ n @opportunity to create financial freedom of which others can only dream. Of9 K G3 }1 @: m E! y/ ~7 W# P' m
course, the key word is focus. And with an August line-up of 'Members Only'1 A* L$ j' G- W. a3 X1 t5 Z
events like this, you can't help to become a real estate investment champion4 m E$ Q7 v4 _! C+ e
when you take action as a full REIN Member.
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$ x1 L2 z: W% s3 WFocus on the fundamentals, keep emotions out of your decisions, and enjoy the2 l9 ?- i( S+ _/ S) ^0 Q
results in just a few short years. |
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发表于 2006-8-25 08:35
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