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NEW HOUSING PRICE INDEX...& w% ]% {4 x+ y* i7 a
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The New Housing Price Index, has just been released and it provides some very
5 t! p+ c. P% W3 j6 b7 z/ f7 ?interesting insights, not only into where the market has moved, but where it+ K. E' v$ v u. a2 Q6 i
will be going.
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; L2 e9 [; f) E, g$ x) MIt proved, once again, the value of looking at fundamentals behind a market.' O9 X" {% M0 _3 K
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The New Housing Price Index is compiled by Statistics Canada and is used by
, q, W. h0 h# ?5 b2 a' _5 e- Ysophisticated investors to see how much the market has moved, as well as an
' U2 p# S2 Q1 D* I/ f Q" T8 Jindicator of where re-sale home prices will be moving in the coming six months.
3 |, e3 O' Y; j4 W, FWe look at the ripple effect that new housing prices have on re-sale property
: }" F: `! f" @0 i% Wvalues and can extrapolate what direction re-sale prices will be moving and by
9 ?# }: j q+ m8 ~7 Yhow much.) s8 [9 N& F: e. w' D$ d, M+ |
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For instance, for the last three years, we have told investors to avoid Windsor," ^. ^ j0 D, a3 }7 o2 h
Ontario as an investment area because the underlying fundamentals are not very
$ G. e1 Z' K7 z1 ^7 @strong. This has been proven once again with the release of the latest' c* V1 n. o- Y4 Q1 o
findings. New Housing Prices have actually decreased by .5% during June 2005 -8 T* b0 Z6 ]+ K& m! x) l. r" c
June 2006 proving that fundamental investing works in helping you pick the best( C8 \. l$ e1 q
markets and avoid the flat ones. This .5% decrease should have little impact# x. O7 \6 y& F6 Y% z& F+ i& U1 D. }
on average re-sale values in the Windsor region.
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! m% u& d: Q4 m aTo contrast this, the fundamentals we discuss are so strong in Calgary that the& l! w- T8 g+ _ h
market continues to be super heated. With close to 3,000 net new people into# w- i# O9 h- a! m) s9 s% h4 l/ j
the city every month, the property market just can't keep up. That is why we
) u+ a# R) X2 `$ t( D& Isaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
8 F, i7 T/ U5 b$ J8 ] VThis is great news for the future of re-sale values in the city as these
7 I8 F' A+ ]0 Q3 V+ l cincreases will continue to ripple out into the market for at least the next six
, @: S/ d/ E; K$ \months.
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3 B. w3 \. z, x7 x& h# \Comparing these two regions is a great illustration of the value of not getting
' }3 O! e! K; c# Pcaught in the 'emotional guessing game' by just focusing on the underlying6 n& Q; R2 s6 [
fundamentals. It is sad to see those people who said in the last 2 years that
7 d5 G0 v0 z1 h- }! C, }the Alberta real estate market was over and they were going to sit back and wait
( b( L& W1 ?- z( k' G# X7 [until it drops. Quite obviously, they have missed out on AMAZING gains, all
9 y/ n5 P$ C0 e5 @/ G- i4 ubecause they didn't follow fundamentals, they just led with their emotions.' m& v' m E3 u/ }0 p7 ?
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
0 ], Y3 v- n4 {6 ]+ h$ ?2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June
/ ?! u \* H& X) I$ y. i7 Q! q, ~+ z; r2006 New Housing Price Index for:
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5 u( Q, W3 t6 g! ]2 [- x9 P2 BVancouver . . . . . . . . +5.2%# Z: L3 c) c, S% n% h% d8 j
Saskatoon . . . . . . . . +8.5%
6 E& x9 R/ q5 q: xLondon . . . . . . . . . . . +3.0%- U4 ? {, b4 z: M; c0 F! L
Hamilton . . . . . . . . . . +4.9%" {! i4 r5 h& r- \, {, }& ]( m
St. Catharines - Niagara . . . . +4.9% Z5 g$ @; R ]/ t
Toronto and Oshawa . . . . . . . +3.27 U7 Y3 n: A6 W! z* E$ A* S' h
Ottawa - Gatineau . . . . . . . . . +3.1%
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1 z% k& y/ ^/ P3 n8 T JFundamental investing ALWAYS makes you look like a genius - emotional investing, `9 ^/ e8 t" f* h/ A8 s! g0 L
gives you quick highs, but also quick lows. Well done on your focus!/ @- Z5 E4 ~7 ^) } H9 ]0 z
8 U! {4 T( N1 q5 ~3 {: j! G$ MAs the fundamentals have been showing all along, the Alberta market continues to
% b6 F' ~) W2 Q" V9 a0 {be strong, as in-migration and job creation continues to attract people from not
6 R7 r% j2 n1 a3 X" U( _only across Canada, but from around the world. Our average wages are
6 J% Z/ j2 V* K$ _% qincreasing, our population is increasing, our unemployment rate continues to9 u6 X. C% r% ^5 i! B) M( D( Q, {- O
drop and our GDP growth is slated to once again lead the country.
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0 y% Y0 x* R2 aHere are some very interesting facts that are helping to support the strong1 e8 I# p" c- L* j! e0 ^
fundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in
3 y+ ?1 V# _ G6 ~Canada, with Alberta once again leading the way. In fact, the projected growth
; f* H1 u4 o/ K7 S/ r: v$ o8 Pfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
9 f T8 G. Y* y( M( N' w' Pthis is slated to occur even with the labour shortages we are witnessing.
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( v6 t9 n2 K, }" a) |/ W2. People are discovering Canada as an investment center from all over the* U. R+ _5 P( J% f+ a8 `/ m
world. Recently, there have been investors coming here from Asia, Australia,
% v/ M$ B3 Q! v$ w/ mthe US, UK and Europe. In fact, if you review the world's press you will see
. ^' s) @, M; Q8 ?. e0 {that Canada (with a focus on Alberta) is being discussed more frequently.
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6 w( j% ?& `) l; F( ? v3. Don Campbell has just returned from presenting our Canadian investment
$ b5 A5 ^6 F* x6 e7 tatmosphere (including Why Alberta - Why Now") to a group of major investors in
( h% R6 \, [- F$ ]Dublin, Ireland, and the response was overwhelmingly positive. In fact, after6 [# W/ |) D q# O4 N
Don presented the economic facts, many of these investors (who could invest$ w& q/ ]6 Q2 d' Z. e5 S4 ]
anywhere in the world) have already booked their flights to here. Once again
7 e& S& H# f# K4 V/ Uproving that when the true numbers of our economy are presented (along with the4 P% d& U5 `# e' n
political stability of our country), there is no place in the world that can V0 \3 a7 F. ^0 ~, M# a
beat it for long term investment." K1 t* ?6 o1 i% F5 J) l
# Y2 x6 S4 r" S U' F% |: ]; m" O4. Job creation continues to be strong (with a small lull in June); definitely
, D: j* Z# E6 _1 Qa sign of strong long-term fundamentals. RBC has also been following the job
4 Y9 k+ k* N z/ ^' H* T# Wcreation situation and here is what they are saying: (www.rbc.com/economics)
0 _! d4 c t. C! [ Z) j: i2 }"After generating a substantial 96,700 jobs in May, the largest such gain since
7 b! @: m. N& f! ~/ ~; lJanuary 2002, the economy lost a modest 4,600 jobs in June...
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: x/ ?. B4 \1 Z& a) oStrength in the Canadian economy contributed to a gain of 215,600 jobs in the
+ a/ g% K8 g: U1 P* _/ nfirst half of 2006, a feat not matched since the second half of 2002. With the
: A% m* O8 c3 I. G8 geconomy widely expected to grow at a more moderate pace in the second half of
. ~8 L. ?- k% d6 }the year on the back of slowing trade activity, this impressive showing may not
& r4 Y2 N) H5 ?- S4 P& `repeat itself. We expect that employment grew in July at a pace consistent with% C5 K/ r8 c! V: K; G: V
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
, K, o" b/ P) v3 W# C( fits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
2 E$ f8 ~* P0 ?! e! D0 hof 6.1%." Overall very good news. Now the key is to ensure that the region in
/ s8 S- m1 o- `* K, [which you are investing is continuing to generate jobs and increasing incomes.3 D# y, H" [# x9 J8 ]
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In other words, it is a great time to be taking advantage of this strong
! I/ \+ f! u& Z8 ?; u; ~- n! oeconomy, avoiding 'excuses' and to especially not listen to the uninformed
4 l) d* Q* N9 f* M9 P4 d6 y'dream stealers.' As long as you stick with your game plan, you continue to do/ J9 z0 c; P- k4 ^7 u
your due diligence, and you remove emotions from the equation, you will see the/ \7 S; K7 T1 W6 T& |7 D8 j" Z3 R
opportunities that are right in front of you, right here in Alberta. Let the
, p2 n0 Y& _3 ^3 M! B, a5 t'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
/ T0 l* n0 }% I' l( }and your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison.( r0 k. Q& X4 O0 L" a4 Q
8 g% Z+ H8 `/ ~) _" fKPMG has recently released a comparison of the true Top Federal and Provincial
- I3 ^5 B& u* J6 {* J3 i. YMarginal Capital Gains Tax Rates per province. It is very interesting to see: X" b* C: K! Q* T
how these will affect your exit strategy. Here are the numbers:2 [- ]. b3 I* a, R) r4 i0 ~3 ?
- O. K ]1 M' E) P8 ZBC . . . . . . . . 21.9%
7 j% x3 \" b! \$ \4 W4 wAB . . . . . . . . 19.5%, [6 p/ M/ |% N: u- ~
SK . . . . . . . . 22.0%! {3 `: [% D: D4 O4 x
MB . . . . . . . . 23.2%! B" v4 i9 s2 T) P0 j' l2 f
ON . . . . . . . . 23.2% M9 c6 @3 F% [; ?* Y: r' ?; `- M7 V
QC . . . . . . . . 24.1%
4 l$ B: a8 }5 \$ R* a2 uNB . . . . . . . . 23.4%9 \+ n; n. r6 Q3 B
NS . . . . . . . . 24.1%9 a; |$ k0 ^* Z' H/ B( D3 o
PE . . . . . . . . 23.7%1 e+ w9 p; r: Y! {, o6 s1 T* q
NF . . . . . . . . 24.3%
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5 \- ] I# T# F. w* [, e5 r, T! aLower capital gains tax increases investment and stimulates the long term
! E c& s# E4 `( A' Y2 x- Q6 G( [economy of the province. It also allows real estate investors to keep more of; O4 O4 v/ Z/ P$ j; d- b
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
+ o5 I; m, V5 y, }) `! G+ hopportunity to create financial freedom of which others can only dream. Of
6 F8 M( ^' P; B3 d7 _! o0 J; Icourse, the key word is focus. And with an August line-up of 'Members Only'' y9 D- `7 I* t4 D" }" q6 y+ [. ^
events like this, you can't help to become a real estate investment champion
+ @' R) | Q' h5 jwhen 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, V. {0 [# }1 G+ j* h8 D. N
results in just a few short years. |
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发表于 2006-8-25 08:35
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