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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
* i( u; f( E7 Dinteresting insights, not only into where the market has moved, but where it e' N, t- a }9 v: x8 ~
will be going.
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It proved, once again, the value of looking at fundamentals behind a market.
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4 V0 O6 ?8 A7 i, h. B) u3 BThe New Housing Price Index is compiled by Statistics Canada and is used by0 G" g h# Y% F' ~4 _$ h$ Z; H2 M
sophisticated investors to see how much the market has moved, as well as an. l( C; y+ ], {' d
indicator of where re-sale home prices will be moving in the coming six months.
' p) b+ h, X2 B( u: r8 QWe look at the ripple effect that new housing prices have on re-sale property, [; W- T7 Y- S+ A3 Y/ S4 J4 s
values and can extrapolate what direction re-sale prices will be moving and by
7 [+ t6 p: `7 T8 r! n) s. Mhow much.
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$ R0 F2 V/ i& [0 p% N5 gFor instance, for the last three years, we have told investors to avoid Windsor,
, I2 M6 p2 F. |, g+ y$ n* OOntario as an investment area because the underlying fundamentals are not very( G! C7 I* {- E& @" N
strong. This has been proven once again with the release of the latest
9 [; b; p9 M ~findings. New Housing Prices have actually decreased by .5% during June 2005 -
9 t/ n& S9 Z. p) Q5 U( F6 J1 }June 2006 proving that fundamental investing works in helping you pick the best
2 |5 x$ N( I; v+ b0 Y! V( X5 Smarkets and avoid the flat ones. This .5% decrease should have little impact- \# q# Q% o% l$ Q, Y7 G
on average re-sale values in the Windsor region.
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7 G9 u. v' a' ]/ D1 FTo contrast this, the fundamentals we discuss are so strong in Calgary that the3 ?3 j5 X$ g! {2 T" D: u" @1 U
market continues to be super heated. With close to 3,000 net new people into$ {4 W/ w' H6 }! t3 G
the city every month, the property market just can't keep up. That is why we
2 J7 x1 r N6 K( J* `9 zsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
: ?+ i" A* r" uThis is great news for the future of re-sale values in the city as these, G1 @7 H0 G- |
increases will continue to ripple out into the market for at least the next six7 c6 `- p! Y) g6 w
months.
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Comparing these two regions is a great illustration of the value of not getting+ {! p& i: d- j4 c- [- A o
caught in the 'emotional guessing game' by just focusing on the underlying) v! @' V" D/ ?" ^' ^
fundamentals. It is sad to see those people who said in the last 2 years that
0 ?: t# R. [5 Y8 [& m" t7 Ethe Alberta real estate market was over and they were going to sit back and wait$ p3 z5 z1 d/ {# {+ N+ E5 ?
until it drops. Quite obviously, they have missed out on AMAZING gains, all
8 a- `% v8 {3 X( c2 C/ ?because 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 (June; ]: L% h; d4 Y# t- w% s2 V0 ~+ t7 v
2005 to June 2006), also great news.
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; s' S4 Y$ l, QBy comparison across the country, these are the numbers for June 2005 - June' z! P+ F+ L8 r" l
2006 New Housing Price Index for:% r8 d h3 T5 j5 n# \. R
; [) q* F- i ^2 c' J# H8 G7 K. TVancouver . . . . . . . . +5.2%
9 Q4 C) E2 W$ ]2 Q% {6 P$ E y* p) RSaskatoon . . . . . . . . +8.5%+ ]2 e+ w7 s; \% H; [6 {
London . . . . . . . . . . . +3.0%
4 |$ B# M& E7 I5 M1 b2 tHamilton . . . . . . . . . . +4.9%
: S' I# ]; g) C: ~St. Catharines - Niagara . . . . +4.9%3 s/ W5 C5 k; ]9 ]2 E8 v+ B7 M' q
Toronto and Oshawa . . . . . . . +3.2* |9 S: M9 s$ B, q( g+ a
Ottawa - Gatineau . . . . . . . . . +3.1%, e2 c( M' b5 `+ C5 {% V
8 u; @4 U1 `3 E/ n3 Y' ?Fundamental investing ALWAYS makes you look like a genius - emotional investing' M+ }- B! ^( r3 a
gives you quick highs, but also quick lows. Well done on your focus!5 y1 K. B) c' t% }% |6 |! ^" f
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As the fundamentals have been showing all along, the Alberta market continues to
& b, p% h/ u2 }/ dbe strong, as in-migration and job creation continues to attract people from not5 D* m1 k$ @0 v5 r- t G
only across Canada, but from around the world. Our average wages are0 Q' c7 @ ? s! J
increasing, our population is increasing, our unemployment rate continues to
$ o( Z4 a' G% k T( q. Ldrop and our GDP growth is slated to once again lead the country.8 Y5 l; Z4 G3 ~
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Here are some very interesting facts that are helping to support the strong
8 Y1 g& d j' W1 C3 @: Yfundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in0 o1 O! z Z/ ~+ x
Canada, with Alberta once again leading the way. In fact, the projected growth$ w5 O3 a" k! M4 |
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
5 y) C E, N2 g6 ?" m$ rthis is slated to occur even with the labour shortages we are witnessing.7 l$ Q* ]& B# h# E! X& o
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2. People are discovering Canada as an investment center from all over the
# Z! U" y6 S3 y1 Bworld. Recently, there have been investors coming here from Asia, Australia,. I: e' K% {: ~. y+ D8 L# `
the US, UK and Europe. In fact, if you review the world's press you will see" R9 t& ^* S& Y/ O. h& a7 R1 z
that Canada (with a focus on Alberta) is being discussed more frequently. " i6 A; ]$ E, t' i7 X- d t
% ^( C9 w7 d+ m" u( F) y5 v3. Don Campbell has just returned from presenting our Canadian investment
}7 J- b. }, k: D9 Y. n latmosphere (including Why Alberta - Why Now") to a group of major investors in0 H# `: k, G; \) O6 G1 U
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
2 C n5 H, U: @' k( q" P1 B S- BDon presented the economic facts, many of these investors (who could invest
+ v1 R( R8 A& x% {9 L4 n( S% e% eanywhere in the world) have already booked their flights to here. Once again0 z- p. h2 \' J. S6 d. Q" i7 N
proving that when the true numbers of our economy are presented (along with the8 E# q3 w$ j2 x+ }$ Q2 I. T
political stability of our country), there is no place in the world that can
) V3 n7 f1 G% G, Kbeat it for long term investment. P6 ]8 @' j+ }( F
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4. Job creation continues to be strong (with a small lull in June); definitely
$ |, w9 k2 `, }' M+ Oa sign of strong long-term fundamentals. RBC has also been following the job' M5 q {+ E' p& M
creation situation and here is what they are saying: (www.rbc.com/economics)
7 v/ G: z& y! ^- k8 V' \"After generating a substantial 96,700 jobs in May, the largest such gain since
+ v) d, x3 Z' X* E7 V: J4 u4 z7 `/ g, XJanuary 2002, the economy lost a modest 4,600 jobs in June... 4 a" W$ q% a* B4 p: d/ l
l& y4 @8 y' n" [Strength in the Canadian economy contributed to a gain of 215,600 jobs in the
% x% \& N4 r% Q! W# V0 e1 K _! hfirst half of 2006, a feat not matched since the second half of 2002. With the
2 X: K. h8 t; `; V [+ ^2 meconomy widely expected to grow at a more moderate pace in the second half of Q2 E7 C) M+ H6 ~
the year on the back of slowing trade activity, this impressive showing may not9 Q4 v( |8 ^8 ~/ f( h
repeat itself. We expect that employment grew in July at a pace consistent with
6 ^ B4 d0 [9 z. ? o4 fits recent trend of 24,000 jobs a month. Assuming that the labour force grew at; W; W# I& E2 j, M. f
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
( S* a6 L( }- V+ x. `5 k; ~of 6.1%." Overall very good news. Now the key is to ensure that the region in0 F; X/ {7 K1 f2 v- t4 v- T/ y
which you are investing is continuing to generate jobs and increasing incomes.2 C& b4 S% ^- E! F2 O9 T
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In other words, it is a great time to be taking advantage of this strong! T. D. Y8 {% U1 Y3 _- V
economy, avoiding 'excuses' and to especially not listen to the uninformed
. `) m% _$ {0 ]. w7 o8 o/ R'dream stealers.' As long as you stick with your game plan, you continue to do) ?" ~( Y8 r g3 m0 V; U( {
your due diligence, and you remove emotions from the equation, you will see the
7 k. s' s3 D/ z9 Z, m ]2 Qopportunities that are right in front of you, right here in Alberta. Let the
# [# L8 f4 o8 C2 Y'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
0 S% p X1 k9 Z/ q. j% f, k, x" Gand your financial freedom has surpassed even your wildest expectations.
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" k4 L5 s# A/ MCapital Gains Comparison.8 r( [0 R* Q# T* f7 h q- o6 [
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KPMG has recently released a comparison of the true Top Federal and Provincial
: x. W, r8 |8 VMarginal Capital Gains Tax Rates per province. It is very interesting to see8 t" \, C' r* c% G8 q, Y* t8 }
how these will affect your exit strategy. Here are the numbers:) O$ I9 Q& L5 _0 x! Q" W# W. I
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BC . . . . . . . . 21.9%/ P/ z9 R4 e, W: A; ] M
AB . . . . . . . . 19.5% h/ i$ d( u' C7 C! u
SK . . . . . . . . 22.0%* E$ x6 Q& s, R% P; O2 l4 B. z4 h
MB . . . . . . . . 23.2%! E, H2 c7 C0 C8 V: W1 `3 `
ON . . . . . . . . 23.2%
* t) Z- K& ]- ^/ O G& VQC . . . . . . . . 24.1%0 d& A- W2 U! ?
NB . . . . . . . . 23.4%
' W( ^! e9 Y: H. gNS . . . . . . . . 24.1%: Z3 n/ }; P/ Z% Z+ }
PE . . . . . . . . 23.7%! [, \# f8 E# {& F. [0 D
NF . . . . . . . . 24.3%
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& R) E n R% \; ]Lower capital gains tax increases investment and stimulates the long term; _8 X2 J6 N, v5 ]. t7 l
economy of the province. It also allows real estate investors to keep more of
$ i: o; i) I& j6 h# B/ Gtheir 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 the2 _4 r( p( \3 o' S& |
opportunity to create financial freedom of which others can only dream. Of! R" f, _/ t& e! i3 }5 r
course, the key word is focus. And with an August line-up of 'Members Only'
8 p) ^+ m- P, X; D. G* ~8 { e: _, n% l7 `events like this, you can't help to become a real estate investment champion) ^' k5 c9 l4 s2 A) _' @2 ?" j
when you take action as a full REIN Member.
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2 D7 T4 u2 W: k& LFocus on the fundamentals, keep emotions out of your decisions, and enjoy the
8 r- r, S1 h$ i3 Q0 j7 {( tresults in just a few short years. |
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发表于 2006-8-25 08:35
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