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NEW HOUSING PRICE INDEX...% D& y' o$ v. h% F( G" d" Z3 E
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! s" r# _& D" c* v2 T9 Z, HThe New Housing Price Index, has just been released and it provides some very
8 o0 w6 W- X2 L% Einteresting insights, not only into where the market has moved, but where it" `& |) c) b/ d. E3 W0 L) V$ d
will be going.! N9 t1 c( Q- @6 F; h5 L: F
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It proved, once again, the value of looking at fundamentals behind a market.+ P4 E. o; x4 q. L) u
! F ?$ f4 f2 zThe New Housing Price Index is compiled by Statistics Canada and is used by9 y. f, g, a( X
sophisticated investors to see how much the market has moved, as well as an
4 r. ?" F1 ]' L6 x# Y7 [indicator of where re-sale home prices will be moving in the coming six months. , O) ~& R! a- [; u
We look at the ripple effect that new housing prices have on re-sale property/ c' O1 O+ d# E$ s
values and can extrapolate what direction re-sale prices will be moving and by! q% h8 N5 \" O4 }! B
how much.
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For instance, for the last three years, we have told investors to avoid Windsor,
0 {' E% i4 Q5 e) f+ uOntario as an investment area because the underlying fundamentals are not very# r. d9 R! ?+ ]$ h( j
strong. This has been proven once again with the release of the latest
( F7 f7 R6 @+ d1 q. N8 p, Mfindings. New Housing Prices have actually decreased by .5% during June 2005 -+ r6 q0 w4 }7 T
June 2006 proving that fundamental investing works in helping you pick the best5 i9 r% \ p- g4 z
markets and avoid the flat ones. This .5% decrease should have little impact, B9 b- q7 h0 Y9 R4 u
on average re-sale values in the Windsor region.
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. ^1 P7 Y0 ^, Y6 \To contrast this, the fundamentals we discuss are so strong in Calgary that the& Q' m: [3 c) z2 ] a9 `* s) w# n
market continues to be super heated. With close to 3,000 net new people into* ~: a4 P( s; p5 T
the city every month, the property market just can't keep up. That is why we; ]* j! V) ` E% S/ Q, \! k
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). 9 v; x+ l" R- a% j
This is great news for the future of re-sale values in the city as these
) [9 i3 R# C. \" |increases will continue to ripple out into the market for at least the next six' W9 w# `3 n8 a# O4 b( G
months. ; p8 K F# m! Q8 o
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Comparing these two regions is a great illustration of the value of not getting1 h7 ~5 C- z& M' Z& q
caught in the 'emotional guessing game' by just focusing on the underlying
: ]4 W! F* [9 J- v5 \: @# o4 u0 }fundamentals. It is sad to see those people who said in the last 2 years that6 l% _. r' S% w1 P# ^* V1 m( K5 W
the Alberta real estate market was over and they were going to sit back and wait% d* h. l/ M7 J' }) c& _# Q8 u2 r
until it drops. Quite obviously, they have missed out on AMAZING gains, all
0 Q2 g% b4 A; }3 Q% s3 W9 \because they didn't follow fundamentals, they just led with their emotions.: E; m3 S. R3 T9 M' D. F h" E* D
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June& I& l2 A+ m2 d- ^) w( x
2005 to June 2006), also great news.$ J6 [) y2 x, l! l
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By comparison across the country, these are the numbers for June 2005 - June
1 u1 M& d9 O3 X1 v- M! V) O2006 New Housing Price Index for:
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~8 P# d( ^: A; j2 w# Q) uVancouver . . . . . . . . +5.2%
! H! a$ e+ [+ z' i USaskatoon . . . . . . . . +8.5%) H) L- }! ~4 R' K$ P0 X
London . . . . . . . . . . . +3.0%
4 K. n/ P/ b# i/ U* jHamilton . . . . . . . . . . +4.9%
. c: ~7 y& `: v7 S/ L8 vSt. Catharines - Niagara . . . . +4.9%
! y' A4 D0 M% kToronto and Oshawa . . . . . . . +3.2+ g6 r" ?& {+ g$ x ]
Ottawa - Gatineau . . . . . . . . . +3.1%. B# ]4 H3 s7 C$ M; p
. h6 |' |7 \4 j" IFundamental investing ALWAYS makes you look like a genius - emotional investing
; X* Z* {9 i( @# ]1 Ygives 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 to5 R, c. e8 K0 ~+ {
be strong, as in-migration and job creation continues to attract people from not* D5 y5 Q6 Y7 G: p
only across Canada, but from around the world. Our average wages are, u. z( L# T1 \+ _
increasing, our population is increasing, our unemployment rate continues to
- I3 ~3 E5 z6 H& q. e9 Ddrop and our GDP growth is slated to once again lead the country.
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Here are some very interesting facts that are helping to support the strong3 ]9 ]5 a& {8 f9 R' ~0 O
fundamentals:3 p& v. U% n% W% E/ C
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1. The Conference Board of Canada is forecasting strong economic growth in8 f3 s2 |. _9 C+ j8 L
Canada, with Alberta once again leading the way. In fact, the projected growth
2 }" B* w1 {* O" S! Ffor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
* x- s! W5 B, l7 T9 i8 Qthis is slated to occur even with the labour shortages we are witnessing.
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; |- j$ _. A' j8 V7 ^+ E% J( M) |2. People are discovering Canada as an investment center from all over the( p/ j! J8 n* a4 N
world. Recently, there have been investors coming here from Asia, Australia,$ V- D# B7 [: u
the US, UK and Europe. In fact, if you review the world's press you will see3 U! c, S! N4 D7 l+ ]" M f
that Canada (with a focus on Alberta) is being discussed more frequently.
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" j: v% H8 t/ {2 I5 ?4 Y9 R3. Don Campbell has just returned from presenting our Canadian investment4 w, \5 ?6 S) u" V
atmosphere (including Why Alberta - Why Now") to a group of major investors in
; {/ q: k$ z$ ]# vDublin, Ireland, and the response was overwhelmingly positive. In fact, after& T/ g% K! F5 q. x1 q
Don presented the economic facts, many of these investors (who could invest
8 v4 [9 }" u! Z ?8 A# m8 _% `/ t/ hanywhere in the world) have already booked their flights to here. Once again$ q' Z1 Y8 n7 f i' d( q
proving that when the true numbers of our economy are presented (along with the6 ~; m4 X5 m- X) ?
political stability of our country), there is no place in the world that can& v9 s6 N! P% N+ l# M' _
beat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely
+ @6 b' s: D" { z0 Q9 y3 qa sign of strong long-term fundamentals. RBC has also been following the job$ E9 i, p& @* S; M! y
creation situation and here is what they are saying: (www.rbc.com/economics)0 s) d8 I- n8 g3 Z2 f1 _" ^5 o/ p
"After generating a substantial 96,700 jobs in May, the largest such gain since
/ r1 O, y' h2 S& F' VJanuary 2002, the economy lost a modest 4,600 jobs in June... 9 z5 E% [1 q8 y& b: U: V
. ^5 O% t9 v, L9 bStrength in the Canadian economy contributed to a gain of 215,600 jobs in the* w: ^8 p7 ]$ {/ ~" W( q' A
first half of 2006, a feat not matched since the second half of 2002. With the
2 v# c* s7 i$ b; ^* p( ^- o) _economy widely expected to grow at a more moderate pace in the second half of- z3 {- m q" g
the year on the back of slowing trade activity, this impressive showing may not1 z7 } W2 n" y" n
repeat itself. We expect that employment grew in July at a pace consistent with1 ?6 h& d( r4 w+ S: u. i1 y5 F
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at* j" p2 K; ]5 |: `. p4 Z* R( B
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate* j8 C6 k R+ ?+ g2 s+ Q
of 6.1%." Overall very good news. Now the key is to ensure that the region in
& {- `1 G* k: ~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 u. k) H0 u# P, g+ v/ |- B3 t
economy, avoiding 'excuses' and to especially not listen to the uninformed5 r ^$ W; Z- x7 S
'dream stealers.' As long as you stick with your game plan, you continue to do
( W4 @* h% c* y2 byour due diligence, and you remove emotions from the equation, you will see the9 S7 S' {5 g8 h! g$ l0 c
opportunities that are right in front of you, right here in Alberta. Let the$ E0 Y2 B9 _/ H3 y% i6 t
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared, [+ `7 `/ w+ R/ n# M
and your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison.: S. e7 j; ?+ E* K" z6 q8 e; [6 V
' C- ^" F1 E: H5 SKPMG has recently released a comparison of the true Top Federal and Provincial
( E; q- S% g- d0 n7 S' q5 A: GMarginal Capital Gains Tax Rates per province. It is very interesting to see9 m c- D. o1 `' W2 F' _
how these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%
1 `, ?0 C- u4 _AB . . . . . . . . 19.5%$ c) G3 @3 E4 Y. Z7 ~
SK . . . . . . . . 22.0%2 B& B; O* ~/ K7 r
MB . . . . . . . . 23.2%( e$ a M' c% p6 h* N9 f" q
ON . . . . . . . . 23.2%
& \8 `+ R4 r5 d8 T7 {) sQC . . . . . . . . 24.1%: M5 U/ x; i- A$ `% j0 W1 ]3 J
NB . . . . . . . . 23.4%( A& |) `0 B4 {- m& F' m- u k& b
NS . . . . . . . . 24.1%8 d' \* k4 F$ U7 K: p- y6 S, E) M7 d
PE . . . . . . . . 23.7%1 Z2 F& R$ |6 s- {0 n8 o
NF . . . . . . . . 24.3%6 M/ T9 i: ?! E0 n+ ^$ w$ c3 T7 @# D: `1 {
2 ^% q5 V8 k. D! KLower capital gains tax increases investment and stimulates the long term+ @/ r! S& E% s3 H* b, x9 Y& I3 w. u3 ^
economy of the province. It also allows real estate investors to keep more of9 [. p8 r8 F1 n! @
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) N d/ g" Z9 _
opportunity to create financial freedom of which others can only dream. Of
& R4 l r( A; r! p" acourse, the key word is focus. And with an August line-up of 'Members Only'
8 u/ W2 ~; B, F1 zevents like this, you can't help to become a real estate investment champion/ F0 C5 L6 `* z4 \, R
when you take action as a full REIN Member.
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a$ x6 E8 N/ }" L' k: TFocus on the fundamentals, keep emotions out of your decisions, and enjoy the
/ J1 }" y% _ r( q* z, Vresults in just a few short years. |
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发表于 2006-8-25 08:35
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