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NEW HOUSING PRICE INDEX...6 P6 d; u% U" N! T
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The New Housing Price Index, has just been released and it provides some very
7 Z+ a0 y; Q* x0 C6 u6 Linteresting insights, not only into where the market has moved, but where it; Q# \: F6 q4 B3 g" F) r- C
will be going.7 H& m/ O- R- H5 f E; i) r
$ M: R/ L/ W( v1 S% Q# pIt proved, once again, the value of looking at fundamentals behind a market.
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% m1 w' D# ~1 o) N9 K- ?The New Housing Price Index is compiled by Statistics Canada and is used by
, Q/ X) v3 I _3 e1 Qsophisticated investors to see how much the market has moved, as well as an4 U) J. C) q8 n0 y5 Q
indicator of where re-sale home prices will be moving in the coming six months. ! j b3 Z* p( P" O+ n1 T# }% ?
We look at the ripple effect that new housing prices have on re-sale property- B' P3 b1 y( Y3 y' B
values and can extrapolate what direction re-sale prices will be moving and by
$ O" |/ H+ L' i; h% q) W2 A& O. chow much.) S( o) x8 X9 o- Z ] U* G, \, N
: \8 s2 N3 U9 R5 l9 A6 g4 Z# PFor instance, for the last three years, we have told investors to avoid Windsor,
2 e: [6 T2 E& [) r( S# W+ nOntario as an investment area because the underlying fundamentals are not very5 d2 p* Z9 ~8 W* b1 T
strong. This has been proven once again with the release of the latest1 J4 S; \/ c& U. @/ j; ^5 D# a
findings. New Housing Prices have actually decreased by .5% during June 2005 -
" {5 V1 H v4 \0 @* @June 2006 proving that fundamental investing works in helping you pick the best
& L( |6 U5 p$ q) _; [ P! v7 wmarkets and avoid the flat ones. This .5% decrease should have little impact* e$ q1 n1 _0 Y7 d
on average re-sale values in the Windsor region.
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To contrast this, the fundamentals we discuss are so strong in Calgary that the* |0 p* k5 M. S, D4 ]- l0 ?- U$ l
market continues to be super heated. With close to 3,000 net new people into( ^0 X+ `( ?8 O( ]
the city every month, the property market just can't keep up. That is why we$ f' [# d7 v3 l q; G( a; H
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
6 B: @+ X" P2 D9 OThis is great news for the future of re-sale values in the city as these
& ^; @6 g! p" B4 O T6 \increases will continue to ripple out into the market for at least the next six
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$ \1 k a7 M1 Q( uComparing these two regions is a great illustration of the value of not getting5 j2 M' w5 |& h! s5 h
caught in the 'emotional guessing game' by just focusing on the underlying
6 \% s3 D- F2 J/ X6 L6 cfundamentals. It is sad to see those people who said in the last 2 years that
8 Z/ Z- W1 \" ` W$ R9 n2 \the Alberta real estate market was over and they were going to sit back and wait
/ _! a8 t: d6 Y q$ xuntil it drops. Quite obviously, they have missed out on AMAZING gains, all
" \ X2 V/ ]) F% ?, o; N, n3 qbecause they didn't follow fundamentals, they just led with their emotions.; r, h& r) ^' x6 }2 P
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
( \- B5 r+ ?1 v$ F' T. C7 X9 M2005 to June 2006), also great news.
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/ g( m2 l# v2 ~$ s" DBy comparison across the country, these are the numbers for June 2005 - June. z) Z& z2 N; g4 [: | b
2006 New Housing Price Index for:
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Vancouver . . . . . . . . +5.2%- u* _2 w0 E1 k- F: q! o- Z1 w
Saskatoon . . . . . . . . +8.5%
8 m* C7 q f: y; X" MLondon . . . . . . . . . . . +3.0%6 b0 U" ~% z. y8 V, c: W4 O" k
Hamilton . . . . . . . . . . +4.9%5 I8 @) Z/ `" Z$ y$ {1 B- E
St. Catharines - Niagara . . . . +4.9%5 ^( I% O% O$ i/ m: L
Toronto and Oshawa . . . . . . . +3.2
1 w$ _6 F5 L$ e; VOttawa - Gatineau . . . . . . . . . +3.1%
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Fundamental investing ALWAYS makes you look like a genius - emotional investing" u5 i) o/ W4 l8 J" r0 X) S* J4 A. D
gives you quick highs, but also quick lows. Well done on your focus!; N8 i) J( W" O. d: h0 D
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As the fundamentals have been showing all along, the Alberta market continues to
: E; _: E" J3 E! [3 }6 M+ R! H% Dbe strong, as in-migration and job creation continues to attract people from not
: f+ _9 [+ ~! wonly across Canada, but from around the world. Our average wages are
+ L: T6 s' K3 n. y/ F1 v3 yincreasing, our population is increasing, our unemployment rate continues to
9 Y2 O3 H! R- hdrop 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 strong1 f X$ {, c( a4 v
fundamentals:
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3 l. g- d/ N c# h) n" U1. The Conference Board of Canada is forecasting strong economic growth in+ }4 A3 c9 W& L( g
Canada, with Alberta once again leading the way. In fact, the projected growth
0 N! B. I$ n# O+ ufor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and2 y! N% G- E6 A2 b9 x
this is slated to occur even with the labour shortages we are witnessing.
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: |, e% W* P4 K2. People are discovering Canada as an investment center from all over the/ A' M1 |% k' Y* ^; }
world. Recently, there have been investors coming here from Asia, Australia,8 `# Z" H/ w* E r
the US, UK and Europe. In fact, if you review the world's press you will see
$ D7 \5 |+ O7 E- d6 Rthat Canada (with a focus on Alberta) is being discussed more frequently. # ?3 z) b. E; z
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3. Don Campbell has just returned from presenting our Canadian investment
! `1 s+ L9 b2 M7 `. d8 A1 Datmosphere (including Why Alberta - Why Now") to a group of major investors in+ x" A, q d& [* C1 Y
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
6 M0 D* c q w0 lDon presented the economic facts, many of these investors (who could invest
7 M" g8 v# B2 w4 h5 ianywhere in the world) have already booked their flights to here. Once again
7 z! z) T0 C0 _proving that when the true numbers of our economy are presented (along with the% E# M$ J; S- a$ n- e+ b2 P& ?* G
political stability of our country), there is no place in the world that can) A) b, ^$ V6 H4 Z- \; O
beat it for long term investment.
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- U% C+ Q. d2 L- P; m& V' P4. Job creation continues to be strong (with a small lull in June); definitely
6 W5 z0 r( l+ O5 W1 m! C5 ma sign of strong long-term fundamentals. RBC has also been following the job) W- b6 p) A6 k* C
creation situation and here is what they are saying: (www.rbc.com/economics)3 x6 g2 y9 `( b) A
"After generating a substantial 96,700 jobs in May, the largest such gain since" X( N) K- ]. w4 Q& ?* b
January 2002, the economy lost a modest 4,600 jobs in June...
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+ {; C: W( Y' U( Z& B1 M# lStrength in the Canadian economy contributed to a gain of 215,600 jobs in the, e% Q/ x; l3 j1 }9 \5 X& |
first half of 2006, a feat not matched since the second half of 2002. With the# u* L+ `& {% k
economy widely expected to grow at a more moderate pace in the second half of
# Y3 J( t4 L' f& X: |. f8 othe year on the back of slowing trade activity, this impressive showing may not
( b0 j5 E$ }& B1 x, T$ @; qrepeat itself. We expect that employment grew in July at a pace consistent with
- C0 @1 X3 T6 k- zits recent trend of 24,000 jobs a month. Assuming that the labour force grew at! Y7 K' j7 C; Z# m6 Y1 d+ l
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
, `. b. y. k8 h& O, Pof 6.1%." Overall very good news. Now the key is to ensure that the region in; i3 K6 @- o9 u5 `
which you are investing is continuing to generate jobs and increasing incomes.
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9 j M; X9 x9 U8 w; P3 Z% s* } }In other words, it is a great time to be taking advantage of this strong! ^, n; }6 O0 S/ C9 y9 r5 D1 v: }
economy, avoiding 'excuses' and to especially not listen to the uninformed/ K+ y1 ]: v9 e5 U
'dream stealers.' As long as you stick with your game plan, you continue to do
( T# S1 V3 N7 _' L! ayour due diligence, and you remove emotions from the equation, you will see the% C0 x" v8 x: G9 i& a7 c& D
opportunities that are right in front of you, right here in Alberta. Let the
% G( G5 ]8 h! @: o" f, E8 Y'dream stealers' call you 'lucky' 5 years from now as your net worth has soared% Z. I: Z0 @# _' i8 `
and your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison.
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6 U: [/ G- ]7 G! K( I rKPMG has recently released a comparison of the true Top Federal and Provincial
; y' u) F! M5 H0 U, L+ wMarginal Capital Gains Tax Rates per province. It is very interesting to see
6 U4 `- u! D4 nhow these will affect your exit strategy. Here are the numbers:
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2 _# P- k- v0 H# s$ M. Q g# uBC . . . . . . . . 21.9%
" s: J/ W( S: ~4 ?+ k. fAB . . . . . . . . 19.5%
# j* N# Z) ~8 E. nSK . . . . . . . . 22.0%& |7 _/ z+ p& d" ^3 m6 \ F% Y
MB . . . . . . . . 23.2%8 n6 l2 o O3 y( T% C. Q9 a
ON . . . . . . . . 23.2%
/ q% x8 h3 n( K5 @* HQC . . . . . . . . 24.1%7 [1 D( T0 {. }! p
NB . . . . . . . . 23.4%+ }9 c1 f0 G W0 Q- H7 Q
NS . . . . . . . . 24.1%' r u% }+ P4 P: s& G& g" u
PE . . . . . . . . 23.7%
- Y7 G7 S& w5 q, }' J$ p! \8 _# LNF . . . . . . . . 24.3%
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Lower capital gains tax increases investment and stimulates the long term6 @; \1 n5 O4 T* U: A
economy of the province. It also allows real estate investors to keep more of
. O1 k5 W+ W2 L4 k1 }$ I7 ntheir 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; Y# {+ W; r' O
opportunity to create financial freedom of which others can only dream. Of1 y, I1 k: m8 t: g4 `: Z1 K3 G
course, the key word is focus. And with an August line-up of 'Members Only'& |$ `1 F# {) J& G/ N( p0 j4 A
events like this, you can't help to become a real estate investment champion$ [: r: |, A: g/ t& z5 i
when you take action as a full REIN Member.
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6 E8 l# K! X) y, O' b+ p( t" q5 CFocus on the fundamentals, keep emotions out of your decisions, and enjoy the' }3 R2 n* b7 \- r4 E0 t( x$ I7 Y
results in just a few short years. |
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发表于 2006-8-25 08:35
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