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NEW HOUSING PRICE INDEX...
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; w, s/ X4 M) `; BThe New Housing Price Index, has just been released and it provides some very
% i, Z5 Y0 c- Z+ j4 P }interesting insights, not only into where the market has moved, but where it
) I, H" j7 G H) q9 q3 fwill be going.* j4 S) U( u. W7 W% M8 r X W
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It proved, once again, the value of looking at fundamentals behind a market.
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1 p: `$ H$ {( [8 _6 z9 L% AThe New Housing Price Index is compiled by Statistics Canada and is used by
% S# z; u5 O& D2 Z% G5 B% asophisticated investors to see how much the market has moved, as well as an* g, L' w! \4 V: e* k
indicator of where re-sale home prices will be moving in the coming six months.
* i& @2 m1 ?- _' ]We look at the ripple effect that new housing prices have on re-sale property
0 k3 t8 i% g) U: u1 o8 m9 Gvalues and can extrapolate what direction re-sale prices will be moving and by
- }2 Q4 _! q' [) Q/ k& \how much.9 q' O& ?3 ] @3 s
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For instance, for the last three years, we have told investors to avoid Windsor,1 I$ j$ n( l8 r7 r/ g! t, F5 v
Ontario as an investment area because the underlying fundamentals are not very
8 Z& P/ _7 A; _- xstrong. This has been proven once again with the release of the latest$ \: s; Y& @0 R8 z% r6 Z
findings. New Housing Prices have actually decreased by .5% during June 2005 -$ r& m+ F& W2 ~1 r% {
June 2006 proving that fundamental investing works in helping you pick the best
3 Q) B0 o7 a- \3 g5 a0 W% W7 X* umarkets and avoid the flat ones. This .5% decrease should have little impact* n( ?2 y: h# x7 M$ T$ l
on average re-sale values in the Windsor region.& D& i! [ ^# w( C+ `( ?! `& S* [
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To contrast this, the fundamentals we discuss are so strong in Calgary that the
' `" v( [) z T# f: L' q; P. emarket continues to be super heated. With close to 3,000 net new people into4 w* |( B# K! w9 r2 L7 o2 ^
the city every month, the property market just can't keep up. That is why we
( W C3 J" G# L- T* {6 ^saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
0 Z3 o" X4 w. s0 v) H$ NThis is great news for the future of re-sale values in the city as these
. p8 N5 \1 A# a% Uincreases will continue to ripple out into the market for at least the next six
8 }! r5 {7 ~# [9 Omonths. 9 |2 H: b) X- b. b5 e
8 x( m/ @# J& Y* j0 z% `% oComparing these two regions is a great illustration of the value of not getting
! m; U! [4 d$ qcaught in the 'emotional guessing game' by just focusing on the underlying2 n- L# {1 U, i6 J, l7 N
fundamentals. It is sad to see those people who said in the last 2 years that
) P- C, e# {, J1 k% H, ~ Kthe Alberta real estate market was over and they were going to sit back and wait" q, V8 b! l4 z: V- {
until it drops. Quite obviously, they have missed out on AMAZING gains, all% R2 M: L5 ?+ w6 }! l
because they didn't follow fundamentals, they just led with their emotions.* I, ^2 |; I; B" i( I
' E$ k. D+ M5 s4 M g4 iBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June: s6 { e" O- Q& V
2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June
- _9 Y5 \" I7 ~" n2006 New Housing Price Index for:. h; o- |% n# y* ]! ?( `) j
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Vancouver . . . . . . . . +5.2%
/ \9 g2 P$ }1 V/ eSaskatoon . . . . . . . . +8.5%
& s3 A$ n' g. \3 `London . . . . . . . . . . . +3.0%
6 t( {5 b6 m0 K$ WHamilton . . . . . . . . . . +4.9%7 w# m( b4 q% o
St. Catharines - Niagara . . . . +4.9%
+ a1 O$ a! z& O: b, S k1 fToronto and Oshawa . . . . . . . +3.22 Z z# J; {$ _, G! D. ~% X
Ottawa - Gatineau . . . . . . . . . +3.1%
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Fundamental investing ALWAYS makes you look like a genius - emotional investing# j0 m. u9 H+ y1 X( |
gives you quick highs, but also quick lows. Well done on your focus! v- B( @9 ^6 j \
1 z: h+ d# p: R M, `5 BAs the fundamentals have been showing all along, the Alberta market continues to
2 ]+ O1 F* S) j+ Q4 W% Xbe strong, as in-migration and job creation continues to attract people from not
6 G$ C4 a T) `0 f( {3 Konly across Canada, but from around the world. Our average wages are
! `, ^# Z5 G1 F* G2 l/ w. ]2 sincreasing, our population is increasing, our unemployment rate continues to& {0 |1 f! }' C4 x! l
drop 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 strong
9 C# F' C g4 ~1 V9 mfundamentals:/ d/ ~ v$ S7 d. }7 Z) [! {- P
% t# L2 a7 P' d8 C0 l$ _1. The Conference Board of Canada is forecasting strong economic growth in
1 I/ l3 o. s0 K* T D5 ICanada, with Alberta once again leading the way. In fact, the projected growth
+ ?# \) `- j; S9 nfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
% w$ f2 ~( M" c! d/ Ethis is slated to occur even with the labour shortages we are witnessing.
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2. People are discovering Canada as an investment center from all over the2 b; ~' q$ @: W. Q
world. Recently, there have been investors coming here from Asia, Australia,0 F; p- `8 K" I7 Z
the US, UK and Europe. In fact, if you review the world's press you will see
5 P: Y. g) Z& g! Z! \: N% A( Fthat Canada (with a focus on Alberta) is being discussed more frequently.
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! Q. Z6 u2 r. N3. Don Campbell has just returned from presenting our Canadian investment
" ^* V& F6 _# Z: M4 Z- `; L, f+ Iatmosphere (including Why Alberta - Why Now") to a group of major investors in* A) t' {0 H/ z* \' ?4 Y
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
3 C. y# t( f4 m, MDon presented the economic facts, many of these investors (who could invest
: u/ s# i' N: U2 r$ P. Eanywhere in the world) have already booked their flights to here. Once again
" V5 o) m$ Z1 j/ A1 E) [+ Gproving that when the true numbers of our economy are presented (along with the9 q8 K T( U& @6 A1 q
political stability of our country), there is no place in the world that can
) [$ O; b( _$ r, A9 F- R' ~beat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely
0 j. C( p0 z* t) m' `/ e, Ga sign of strong long-term fundamentals. RBC has also been following the job
( Z+ H3 a& c* R; j% Ocreation situation and here is what they are saying: (www.rbc.com/economics) }' m8 U, v) t0 s6 |( I
"After generating a substantial 96,700 jobs in May, the largest such gain since
2 g$ }! E. @/ T4 }January 2002, the economy lost a modest 4,600 jobs in June... / Q2 I% O0 Q9 @( ]( Z
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the5 t0 l, R7 c w6 [. H$ n- v' J4 m
first half of 2006, a feat not matched since the second half of 2002. With the* B7 ?" C2 _4 A) M
economy widely expected to grow at a more moderate pace in the second half of/ u3 q1 v3 X+ x F0 D
the year on the back of slowing trade activity, this impressive showing may not
, g9 Y t/ y; e9 {& z; Wrepeat itself. We expect that employment grew in July at a pace consistent with6 B7 `& R5 S% W
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
) G9 T/ S+ G2 M5 s d: i. lits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
- o4 b/ N2 M& g3 C! \of 6.1%." Overall very good news. Now the key is to ensure that the region in
/ M- {) Y3 R1 e. ^2 L" O. ^which you are investing is continuing to generate jobs and increasing incomes.& e$ O: y. d9 l E1 A
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# h+ I6 ~6 K- ?% J8 O6 K% O1 rIn other words, it is a great time to be taking advantage of this strong
: K) i9 z. v8 a$ n% L4 D9 jeconomy, avoiding 'excuses' and to especially not listen to the uninformed
+ u6 @, W2 s3 n+ u' ~9 W'dream stealers.' As long as you stick with your game plan, you continue to do
) b; t; H2 j0 Iyour due diligence, and you remove emotions from the equation, you will see the4 t, S$ P& P* S, V1 K9 X0 d3 k l0 c# [
opportunities that are right in front of you, right here in Alberta. Let the
0 F7 u# i3 E' B'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
. n+ R# Q1 J) [' R r# Fand your financial freedom has surpassed even your wildest expectations.% O7 ^3 M( N2 f: c
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0 y* d* @( }& R7 wCapital Gains Comparison.
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1 p: B% S$ n6 d) }# _" BKPMG has recently released a comparison of the true Top Federal and Provincial4 ?$ w+ e o' g& j- e
Marginal Capital Gains Tax Rates per province. It is very interesting to see
! |( i" u! o! j! m! s5 W Ihow these will affect your exit strategy. Here are the numbers:
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. B! c6 i/ y' _; ]6 G( gBC . . . . . . . . 21.9%
: m& J" R+ l, o- X& mAB . . . . . . . . 19.5%
7 W1 W8 I; a7 J) N% B3 }6 N, ZSK . . . . . . . . 22.0%
* ^6 O. F0 B A, m) xMB . . . . . . . . 23.2%% u5 z4 J C% a
ON . . . . . . . . 23.2%4 P1 _3 a+ F$ B7 C" l" D* A
QC . . . . . . . . 24.1%, ?6 L2 o7 p+ y5 ^9 i( x
NB . . . . . . . . 23.4%
/ Y( ]9 @2 l) Y, N% I# D, x1 {5 oNS . . . . . . . . 24.1%
9 c4 X3 p% E0 X- BPE . . . . . . . . 23.7%
' Y; I+ E5 M- h1 a; \NF . . . . . . . . 24.3%6 _6 }! e* @- y2 q' I
9 T$ K& U2 J+ a3 c0 rLower capital gains tax increases investment and stimulates the long term D7 H% t5 R! u( `( r
economy of the province. It also allows real estate investors to keep more of
. u/ ~# H" m& W) [# dtheir profits at exit time. Always a good number to pay attention to.
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; ]* \8 F! S: F- u! AOverall, by staying focused for the next short period of time, you have the
1 h, r* d, t, V' g; gopportunity to create financial freedom of which others can only dream. Of
) K+ \9 H! k5 t. l# K# n4 Vcourse, the key word is focus. And with an August line-up of 'Members Only'
1 y4 C; O( T8 G9 M' W0 \, Revents like this, you can't help to become a real estate investment champion
/ E, J8 n E6 h7 P2 c6 ^when 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
( A+ A0 q* k: y. {3 t/ lresults in just a few short years. |
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发表于 2006-8-25 08:35
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