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NEW HOUSING PRICE INDEX...8 ~% E$ \, Q( @1 F; T
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t4 S# `- K3 d( H2 |* s/ ]The New Housing Price Index, has just been released and it provides some very1 k) k% f5 x* G" `3 d8 B
interesting insights, not only into where the market has moved, but where it# Y `: A* f: e/ ^
will be going." A, D" s4 e/ i8 Q- ~
" E6 S" W% g) B3 a+ N1 DIt 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
( `+ j1 A) k, v; M6 C- esophisticated investors to see how much the market has moved, as well as an: b1 M2 a% o5 r
indicator of where re-sale home prices will be moving in the coming six months.
( H: C, W: H, ?We look at the ripple effect that new housing prices have on re-sale property) }9 ^% m2 b9 ~$ }8 R. M; a; H
values and can extrapolate what direction re-sale prices will be moving and by
$ r0 I6 G7 ~" Y/ D# Z: z: Jhow much.
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For instance, for the last three years, we have told investors to avoid Windsor,
% b- N! ~1 ]2 ? MOntario as an investment area because the underlying fundamentals are not very) |2 ], {. o. C( K+ l* o0 m! o
strong. This has been proven once again with the release of the latest
' l+ W! C7 U* t7 x1 }findings. New Housing Prices have actually decreased by .5% during June 2005 -! m- D1 d9 g0 j. i% C: p
June 2006 proving that fundamental investing works in helping you pick the best: _; D0 M1 i+ Q- }
markets and avoid the flat ones. This .5% decrease should have little impact
5 J4 h& h+ N, |( |5 [; ~on average re-sale values in the Windsor region.
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6 g) r! G9 I- j- M6 gTo contrast this, the fundamentals we discuss are so strong in Calgary that the
! p! m* @4 f- x: O) ^market continues to be super heated. With close to 3,000 net new people into
: Q& H: N; l5 t( K6 t1 ?" Wthe city every month, the property market just can't keep up. That is why we
; A) E3 S% n2 N$ Y) ~! U& s4 Msaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
0 o' c) Y! q. c5 c# r' V" s9 OThis is great news for the future of re-sale values in the city as these
- V# O; a; g; }% L: c- r' \increases will continue to ripple out into the market for at least the next six
: i1 S$ _/ N" mmonths. 4 o8 i1 {3 o7 v
1 _+ [% z/ d! K9 n- P/ JComparing these two regions is a great illustration of the value of not getting
- b' X e& F% Q+ l) n( Ucaught in the 'emotional guessing game' by just focusing on the underlying: v, ?$ g. Z2 z6 Q! l
fundamentals. It is sad to see those people who said in the last 2 years that
% A2 B) h/ m/ H: S9 P0 x8 ~the Alberta real estate market was over and they were going to sit back and wait' M; q+ _6 H9 n0 z, a( J
until it drops. Quite obviously, they have missed out on AMAZING gains, all
g. b2 g+ x8 w# Q8 U# X7 Dbecause 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 (June4 O0 y" ?. e7 |& r8 N
2005 to June 2006), also great news.- a3 P+ L# O8 ~/ z8 E( z' o
/ b' v7 ~. u, O3 u; Q! q1 H" ], cBy comparison across the country, these are the numbers for June 2005 - June
, R4 l8 M3 P7 S9 e5 X3 n, ?$ ]" ?: ^2006 New Housing Price Index for:1 o" [8 A4 c" x8 y+ |; t% D1 Y
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Vancouver . . . . . . . . +5.2%/ M N+ o. r7 P& X
Saskatoon . . . . . . . . +8.5%5 E4 x7 A% k; j' P# h
London . . . . . . . . . . . +3.0%
9 P! U% a3 }% R0 _% @) ?) nHamilton . . . . . . . . . . +4.9%
# D' l% c6 D1 l$ Z, VSt. Catharines - Niagara . . . . +4.9%/ l8 i" B5 N$ k- q
Toronto and Oshawa . . . . . . . +3.2
3 t1 \/ A2 `0 L. a0 B0 R. `Ottawa - Gatineau . . . . . . . . . +3.1%+ `: a+ ~2 ~0 D% _
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Fundamental investing ALWAYS makes you look like a genius - emotional investing9 U( J& P, d( x. ~7 e5 |
gives 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 to6 R! N$ [- p1 C4 E1 n6 \
be strong, as in-migration and job creation continues to attract people from not
: ^& q, G! G" M8 n% k) @only across Canada, but from around the world. Our average wages are* q2 i* }3 @# b. Q2 B" W1 e
increasing, our population is increasing, our unemployment rate continues to) ?* d; z8 [& w8 Y) N, K* C& n$ j7 [
drop and our GDP growth is slated to once again lead the country.
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# J h' I6 x( z: }) D# h* m# ZHere are some very interesting facts that are helping to support the strong- p0 m h) }0 {/ z8 t* U. y; w. p- M
fundamentals:
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' u$ r$ H+ T$ b! J7 A1. The Conference Board of Canada is forecasting strong economic growth in8 M0 W' m9 M. Y; Q5 p
Canada, with Alberta once again leading the way. In fact, the projected growth
* ~' c7 \4 ]" d# s8 n$ hfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
8 d! J7 b9 I. Y+ A3 ~$ g1 uthis is slated to occur even with the labour shortages we are witnessing.
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" F3 I x0 O, T. p9 v: E2. People are discovering Canada as an investment center from all over the" t. M+ Q5 b7 i* A0 R
world. Recently, there have been investors coming here from Asia, Australia,
4 M6 ?2 s2 u% z$ l8 h9 Dthe US, UK and Europe. In fact, if you review the world's press you will see+ a. m$ M6 Q% y! E- a
that 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 investment5 b% n+ _& n+ W4 U
atmosphere (including Why Alberta - Why Now") to a group of major investors in
8 a; \8 ~2 Q4 R9 i! eDublin, Ireland, and the response was overwhelmingly positive. In fact, after$ \& d' \: I- G5 n$ U( }! Y
Don presented the economic facts, many of these investors (who could invest: M, x' {! q$ k
anywhere in the world) have already booked their flights to here. Once again
% ~) `6 q/ n) J5 Kproving that when the true numbers of our economy are presented (along with the; q3 M5 K0 H* K" e1 V
political stability of our country), there is no place in the world that can
/ L. e5 g) |. ]4 \: Lbeat it for long term investment.$ s$ b; _, B5 K
* g3 y0 ~8 S. U: ?8 C2 z% z4. Job creation continues to be strong (with a small lull in June); definitely9 g; u3 S9 ^. b% @" {8 V5 d8 B
a sign of strong long-term fundamentals. RBC has also been following the job
. p/ _! ]7 C% ?4 tcreation situation and here is what they are saying: (www.rbc.com/economics)
" }6 j {* d: u" C" i, W"After generating a substantial 96,700 jobs in May, the largest such gain since
" v. W$ Y' j. pJanuary 2002, the economy lost a modest 4,600 jobs in June... . Z, P( _6 j, F3 q
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the3 c: l9 m! H- n+ t
first half of 2006, a feat not matched since the second half of 2002. With the/ y" q6 X5 X' ~" \% i
economy widely expected to grow at a more moderate pace in the second half of: F8 Z: ?. b1 a9 K, X# Y7 N
the year on the back of slowing trade activity, this impressive showing may not* x1 y1 D$ T8 l' g$ g ~
repeat itself. We expect that employment grew in July at a pace consistent with* H0 K3 H0 Z7 _9 I' l
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at5 O: Z/ z( J$ ~; E% y7 @8 k, x
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
8 P( @$ P$ f7 t- v1 hof 6.1%." Overall very good news. Now the key is to ensure that the region in% A5 M! V z. d
which you are investing is continuing to generate jobs and increasing incomes.4 S# u( l. E6 s8 h3 ^4 E
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In other words, it is a great time to be taking advantage of this strong
" e/ P+ A3 }9 e0 N5 ~: ?1 |economy, avoiding 'excuses' and to especially not listen to the uninformed
& G, O2 m' C( s# m'dream stealers.' As long as you stick with your game plan, you continue to do
X5 c0 P6 C0 u2 S b! c- j. S0 d/ Dyour due diligence, and you remove emotions from the equation, you will see the- K0 z$ Q0 u+ R, S! q$ e) [" B6 ^
opportunities that are right in front of you, right here in Alberta. Let the# O3 {% t8 g9 S! E
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared4 M/ P# W+ S+ T X) |9 [8 a
and your financial freedom has surpassed even your wildest expectations.+ L/ K- f- Y; n: _
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5 ?1 O' V2 [- ?. A" B( RCapital Gains Comparison.( N. S+ T2 b" x9 ^. @8 ?1 H
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KPMG has recently released a comparison of the true Top Federal and Provincial5 C) @# [5 k$ F% r+ Y1 G
Marginal Capital Gains Tax Rates per province. It is very interesting to see: S5 r0 ]1 j8 j
how these will affect your exit strategy. Here are the numbers:
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6 b+ {+ @' X+ \8 ^2 ^0 TBC . . . . . . . . 21.9%
# Z- J, j0 G l, @$ K T5 s0 WAB . . . . . . . . 19.5%
0 [# s( f/ Y& T- i, \SK . . . . . . . . 22.0%1 \7 R. M$ [* R! d# n
MB . . . . . . . . 23.2%% T1 p4 e& g# V+ u
ON . . . . . . . . 23.2%' e& d8 \) Q5 R2 P
QC . . . . . . . . 24.1%
3 }& \0 z* u0 kNB . . . . . . . . 23.4%
$ }+ D& ^+ N! j& q& qNS . . . . . . . . 24.1%
% ~5 {! a) \7 }8 O5 J8 oPE . . . . . . . . 23.7%
& l$ p) s2 \8 f% aNF . . . . . . . . 24.3%6 b! w* @( t; t/ j0 x2 r# l" ]
( D* F5 V! M3 c* ]Lower capital gains tax increases investment and stimulates the long term
% A! V6 I [6 N' N7 C b1 xeconomy of the province. It also allows real estate investors to keep more of
; l& o. z! d9 t* g- H, utheir profits at exit time. Always a good number to pay attention to.
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' `& l9 M& [! @- XOverall, by staying focused for the next short period of time, you have the
0 }8 |' m7 G( vopportunity to create financial freedom of which others can only dream. Of* J: {5 w# D8 ^4 g
course, the key word is focus. And with an August line-up of 'Members Only'
' y/ [1 Y% ]+ x( N' u2 _9 {) Nevents like this, you can't help to become a real estate investment champion) A4 d8 ?3 y/ L5 H0 ^7 _
when you take action as a full REIN Member.8 `7 I" }6 r% t, x4 W
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the
7 D/ W* K' m, Oresults in just a few short years. |
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发表于 2006-8-25 08:35
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