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NEW HOUSING PRICE INDEX...
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, a v( U1 w1 p I" E, [The New Housing Price Index, has just been released and it provides some very
+ t& V6 A- {6 j- ?* ~1 X" n( W8 Y' hinteresting insights, not only into where the market has moved, but where it
4 g; R( g. F& f2 y! N+ wwill be going.
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3 L6 R* f* s" ~# T- U QIt proved, once again, the value of looking at fundamentals behind a market.
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The New Housing Price Index is compiled by Statistics Canada and is used by
8 L1 b- h2 I6 [8 ^: Csophisticated investors to see how much the market has moved, as well as an4 V! M# }7 X$ l/ E
indicator of where re-sale home prices will be moving in the coming six months. 1 R, g; p+ P/ k* f1 L
We look at the ripple effect that new housing prices have on re-sale property& O4 h; O) V$ G3 y( }* g
values and can extrapolate what direction re-sale prices will be moving and by
8 X% s6 M* j1 Jhow much.
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For instance, for the last three years, we have told investors to avoid Windsor,. E, G6 s2 i% U
Ontario as an investment area because the underlying fundamentals are not very
9 W' z) N L; y7 n/ ~# zstrong. This has been proven once again with the release of the latest! X: h6 {& P! x$ e: v; x, o
findings. New Housing Prices have actually decreased by .5% during June 2005 -! ~- {" H3 i/ Q* m
June 2006 proving that fundamental investing works in helping you pick the best
( r/ q. }3 v$ Y& w. ~; [markets and avoid the flat ones. This .5% decrease should have little impact. p1 m _- J" q( K- J
on average re-sale values in the Windsor region.. U: C/ Y. Q: G# w F3 M) j
# f* j4 P d( T8 O+ `- c4 eTo contrast this, the fundamentals we discuss are so strong in Calgary that the* }2 N0 u# g( t; t0 M* }3 j& |
market continues to be super heated. With close to 3,000 net new people into8 K W, Q& o2 N- J7 O! ^
the city every month, the property market just can't keep up. That is why we* ~7 A/ K) m, L+ ~+ T. V# G
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
+ |' J, Q5 T6 a+ B6 BThis is great news for the future of re-sale values in the city as these" l* H; r: Z! c# `/ ?6 \! v
increases will continue to ripple out into the market for at least the next six) l: c- K s& _) s, s
months. & f& r- Z; Z0 m0 M
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Comparing these two regions is a great illustration of the value of not getting
" P% F5 f: s: s9 O5 ]$ M1 |: z3 bcaught in the 'emotional guessing game' by just focusing on the underlying
, x, @: V) v* s) {* K+ @fundamentals. It is sad to see those people who said in the last 2 years that
9 P4 B, ~7 Y) O, W! Y8 e; D( bthe Alberta real estate market was over and they were going to sit back and wait0 }& S+ `& p9 v( E( ~
until it drops. Quite obviously, they have missed out on AMAZING gains, all$ ^, E- U& |; P7 Y
because they didn't follow fundamentals, they just led with their emotions." o }1 [' j1 Q2 K
% z" o2 F/ [5 |By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June2 ~: q+ g& x4 k
2005 to June 2006), also great news.1 g9 f( ?; q5 X
8 A% _8 ]/ Q4 O! q: a' d9 m. YBy comparison across the country, these are the numbers for June 2005 - June
) v2 [7 H# Q; K% {" z; O4 m2006 New Housing Price Index for:
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Vancouver . . . . . . . . +5.2%
+ Q& \0 p7 M- k: B: B/ vSaskatoon . . . . . . . . +8.5%
. f. o3 \, o+ ~2 TLondon . . . . . . . . . . . +3.0%
3 j- g: v7 N" O! o t* UHamilton . . . . . . . . . . +4.9%
8 T8 L9 t2 w: b w( K: v' A/ sSt. Catharines - Niagara . . . . +4.9%4 J" V# j* t! q* m6 }, x# o
Toronto and Oshawa . . . . . . . +3.2) P0 ?% D5 T& ^! f v2 t
Ottawa - Gatineau . . . . . . . . . +3.1%
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Fundamental investing ALWAYS makes you look like a genius - emotional investing5 ]6 U( ~! u1 \" C* `0 @
gives you quick highs, but also quick lows. Well done on your focus!2 o- c: I9 m5 h5 x" p. |
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As the fundamentals have been showing all along, the Alberta market continues to
1 S/ c- D- x l o ?be strong, as in-migration and job creation continues to attract people from not6 Q) ?9 X; V9 t
only across Canada, but from around the world. Our average wages are4 ^3 ~2 N9 p: P: M; O2 V, d! S2 b
increasing, our population is increasing, our unemployment rate continues to
- ^8 T# B/ F7 k2 D3 L, Mdrop and our GDP growth is slated to once again lead the country.0 T6 H, M( \: y# }$ t+ H
$ I* V8 d8 d* A: s7 WHere are some very interesting facts that are helping to support the strong
+ r: m: X3 ^ @3 | e+ Dfundamentals:7 w4 q9 J, l7 P5 K/ }8 O8 Q8 `
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1. The Conference Board of Canada is forecasting strong economic growth in6 \ |, f( m& R' q1 Z
Canada, with Alberta once again leading the way. In fact, the projected growth
4 M6 B& D [5 e. Dfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and9 r' K9 x; N& E" S- v
this is slated to occur even with the labour shortages we are witnessing." W& ?& B+ ]+ |
( p+ ~* T' G9 H; p2. People are discovering Canada as an investment center from all over the
$ t* g- O: K+ k7 `0 G/ Oworld. Recently, there have been investors coming here from Asia, Australia,
3 w% S% V3 g! @0 `the US, UK and Europe. In fact, if you review the world's press you will see
2 Y& G7 Q1 g7 Jthat 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$ U e! X# ^% f4 H& M$ j
atmosphere (including Why Alberta - Why Now") to a group of major investors in7 q5 h: L% g0 e) P7 z4 f
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after/ C7 e9 d2 y9 r9 Y! k: o7 M
Don presented the economic facts, many of these investors (who could invest+ t4 _2 Y' p" T- {3 R! X% u+ ?( y
anywhere in the world) have already booked their flights to here. Once again% X- b2 e2 O/ G
proving that when the true numbers of our economy are presented (along with the( p5 x9 {0 ^5 v5 H0 U
political stability of our country), there is no place in the world that can5 r6 }5 R7 }0 h8 ]
beat it for long term investment.
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! J$ J# V! ?% V8 L: M4. Job creation continues to be strong (with a small lull in June); definitely
; n6 O2 H! y- R" B- g$ ]a sign of strong long-term fundamentals. RBC has also been following the job
3 l2 g' Y3 k6 l- B( Ycreation situation and here is what they are saying: (www.rbc.com/economics)" ]; c- u) w5 N4 Y3 Y
"After generating a substantial 96,700 jobs in May, the largest such gain since
! N4 x! k6 b1 |+ t5 rJanuary 2002, the economy lost a modest 4,600 jobs in June... ; a6 }* f4 V: M8 D
$ m0 R: z( q. J0 c6 D0 S3 B6 DStrength in the Canadian economy contributed to a gain of 215,600 jobs in the
0 E$ E; x$ N' Sfirst half of 2006, a feat not matched since the second half of 2002. With the+ ?0 r0 v8 T( R' i: M
economy widely expected to grow at a more moderate pace in the second half of
# |+ _2 y$ G: B! [/ M) Vthe year on the back of slowing trade activity, this impressive showing may not
8 W& o# Y) [0 J: Jrepeat itself. We expect that employment grew in July at a pace consistent with
7 I/ a" F: l: e: A% l" ^: q, Y: xits recent trend of 24,000 jobs a month. Assuming that the labour force grew at
, r5 ]# @7 E& D$ l, |; O6 t" q: G6 Dits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
" V# B2 ^# g" gof 6.1%." Overall very good news. Now the key is to ensure that the region in
5 E2 v6 ] c+ L+ x7 V! Y# Swhich you are investing is continuing to generate jobs and increasing incomes.
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0 v- J: d) |. ]In other words, it is a great time to be taking advantage of this strong2 k/ |# r4 a3 y
economy, avoiding 'excuses' and to especially not listen to the uninformed7 G" Y; A! @5 D4 Y% n) e9 k1 k* n
'dream stealers.' As long as you stick with your game plan, you continue to do
1 Z& T! Q, u+ G7 W. Hyour due diligence, and you remove emotions from the equation, you will see the
4 k5 F+ R, a0 r8 Eopportunities that are right in front of you, right here in Alberta. Let the
3 R; C' I* x1 M* W/ `'dream stealers' call you 'lucky' 5 years from now as your net worth has soared) N, h- u `+ C& v: ]
and your financial freedom has surpassed even your wildest expectations.
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( z p, X0 M, }* A& [" q: n5 YCapital Gains Comparison.
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KPMG has recently released a comparison of the true Top Federal and Provincial
* u7 `0 N* L7 e& }+ QMarginal Capital Gains Tax Rates per province. It is very interesting to see
- Z3 y- m' x5 t. Ehow these will affect your exit strategy. Here are the numbers:' X/ n8 f! z0 Q0 B: l9 a/ S
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BC . . . . . . . . 21.9%
' b) F1 R" G' ]3 cAB . . . . . . . . 19.5%5 f/ A) Y* ?) J$ r+ w9 t( q
SK . . . . . . . . 22.0%
2 b) [8 M5 C9 q" Z1 ^MB . . . . . . . . 23.2%! r* d0 w9 ~! T, u
ON . . . . . . . . 23.2%( `3 p; N0 k& T# s7 F; ^
QC . . . . . . . . 24.1%
6 e! }! O# u5 L# g" z) bNB . . . . . . . . 23.4%5 q; P! T( ~0 F7 |' l( }
NS . . . . . . . . 24.1%. {- T* u% C' G/ x6 [2 s
PE . . . . . . . . 23.7%& ~4 Z; k0 ^6 D6 p( z6 z1 }$ Z
NF . . . . . . . . 24.3%
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+ L4 L2 Q# t3 _+ j8 |) Y( \; f/ F' }Lower capital gains tax increases investment and stimulates the long term
4 P- W# R* X$ Z- heconomy of the province. It also allows real estate investors to keep more of
) R4 k, q8 v$ e1 Y. ?8 qtheir profits at exit time. Always a good number to pay attention to.
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2 z$ A! b9 T* V* M) T7 z4 pOverall, by staying focused for the next short period of time, you have the
- z7 n X! a" Q! v3 ~! xopportunity to create financial freedom of which others can only dream. Of/ h( x, k6 F7 n: \$ X. C
course, the key word is focus. And with an August line-up of 'Members Only'1 |' q+ }+ c6 `" ~& }
events like this, you can't help to become a real estate investment champion+ X. \2 x2 a3 Q5 p
when you take action as a full REIN Member.+ S. t+ ]/ {1 o4 p7 z1 K5 p
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the0 ? }8 X! C' [' P, d' \
results in just a few short years. |
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发表于 2006-8-25 08:35
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