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NEW HOUSING PRICE INDEX...
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: W- `. N# z6 SThe New Housing Price Index, has just been released and it provides some very
0 V6 E3 e4 ?& M Ginteresting insights, not only into where the market has moved, but where it/ A+ w- C4 U) e: p
will be going.
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It proved, once again, the value of looking at fundamentals behind a market.
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/ O$ E& E& M- l" `( W ]7 SThe New Housing Price Index is compiled by Statistics Canada and is used by8 H) x( x7 Q- x, n3 d1 _' T
sophisticated investors to see how much the market has moved, as well as an8 n7 q% c5 i* e$ F# O
indicator of where re-sale home prices will be moving in the coming six months. & x* S- v" y2 x/ c. p$ P" \( J, _
We look at the ripple effect that new housing prices have on re-sale property0 c7 w9 w6 h" m$ s
values and can extrapolate what direction re-sale prices will be moving and by
% j* t6 q6 ^! l2 `how much.
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For instance, for the last three years, we have told investors to avoid Windsor,3 s1 y c9 L- U! f# n
Ontario as an investment area because the underlying fundamentals are not very
# H1 c8 g7 }; p0 Jstrong. This has been proven once again with the release of the latest
3 P2 A9 s1 U' q7 Z) h, t" qfindings. New Housing Prices have actually decreased by .5% during June 2005 -
. k8 r+ _" S. {( C7 s9 H1 ` kJune 2006 proving that fundamental investing works in helping you pick the best
( B9 `' B& v8 Q2 [, P! `& v4 s0 wmarkets and avoid the flat ones. This .5% decrease should have little impact5 w5 ?) G; T4 A& C, k, H
on average re-sale values in the Windsor region.5 [& J) ^) b7 {3 j7 H! |8 W
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To contrast this, the fundamentals we discuss are so strong in Calgary that the4 ?6 }1 C3 T% S" x7 U6 V9 W9 R
market continues to be super heated. With close to 3,000 net new people into" b! i7 C w$ F n6 E
the city every month, the property market just can't keep up. That is why we9 g: ^! W! l1 q; O4 W( G
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
o# `" F6 G5 `3 }/ \/ q/ R9 qThis is great news for the future of re-sale values in the city as these
7 t) {! ?9 X% |* v) ~# B1 _* iincreases will continue to ripple out into the market for at least the next six& L" X& r3 j% p' a6 u1 h7 p
months.
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1 `" V1 ~# b' _' yComparing these two regions is a great illustration of the value of not getting
4 N6 p* ~" ~$ A; d# y" ccaught in the 'emotional guessing game' by just focusing on the underlying
' A/ s! M$ ^0 Q$ zfundamentals. It is sad to see those people who said in the last 2 years that
% h5 h) m# i, P+ ?2 @, A/ [0 _3 Othe Alberta real estate market was over and they were going to sit back and wait }( s, L" u9 S3 B6 k+ v
until it drops. Quite obviously, they have missed out on AMAZING gains, all
3 W+ E9 Q" g# h% w, E `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( Q% k0 n- j' d5 E+ |, f+ G3 |
2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June
' v5 F: W7 X3 v- ~7 w% Z- I0 x& K) W! g2006 New Housing Price Index for:
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! z" a1 p' b9 t! PVancouver . . . . . . . . +5.2%3 E2 k. s* i" T
Saskatoon . . . . . . . . +8.5%
- [3 {! V' G- R6 v6 ^London . . . . . . . . . . . +3.0%$ A4 @3 {4 E* Q3 S- c
Hamilton . . . . . . . . . . +4.9%
4 U$ p9 w; r7 L9 z3 U! HSt. Catharines - Niagara . . . . +4.9%
! o( R1 l! O# a* c5 q2 l( l! fToronto and Oshawa . . . . . . . +3.2
( ~6 s9 F' Z1 ~: A2 o# ^, eOttawa - Gatineau . . . . . . . . . +3.1%- A- x9 V$ G! d4 z7 @) ?+ l
( d% W+ M ?, M, Z. t4 ~6 C; iFundamental investing ALWAYS makes you look like a genius - emotional investing
$ I5 u( G1 [2 w* z. B( Sgives you quick highs, but also quick lows. Well done on your focus!9 T. p$ ?' D' O& r
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As the fundamentals have been showing all along, the Alberta market continues to6 ?* J: t0 _' j. p
be strong, as in-migration and job creation continues to attract people from not
- A W6 W! P5 D: Yonly across Canada, but from around the world. Our average wages are
) @1 ?8 M2 X7 w# v( z& s+ a5 g! Nincreasing, our population is increasing, our unemployment rate continues to
) ?- K2 w5 l/ P: wdrop and our GDP growth is slated to once again lead the country.$ v- o$ P, E( n
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Here are some very interesting facts that are helping to support the strong
8 d! m: o2 k1 L4 `: ^; Z+ d* Ufundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in
2 u6 s# r1 z* M, E+ y( F$ LCanada, with Alberta once again leading the way. In fact, the projected growth
4 s7 D7 ~9 K7 r4 f0 f M+ Sfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and0 |& _/ y5 f9 g# e8 N
this is slated to occur even with the labour shortages we are witnessing.5 |8 x" m% z: U4 j8 X. o \, R9 w8 ^" m
9 n4 A% O' k6 E* u6 h) p! G2. People are discovering Canada as an investment center from all over the1 T" t5 w* [' [% e. _1 N
world. Recently, there have been investors coming here from Asia, Australia,
) d& M2 P* l8 o" A- J: M4 n) Nthe US, UK and Europe. In fact, if you review the world's press you will see
" J5 N# ~, D$ D/ U+ z* wthat Canada (with a focus on Alberta) is being discussed more frequently. 2 _( J* |: _' ^: v# H
* u- @9 s( X: [8 S3. Don Campbell has just returned from presenting our Canadian investment
% P8 X- _/ r3 T; h# r* }) @: a2 D1 Aatmosphere (including Why Alberta - Why Now") to a group of major investors in
5 ]; x; k7 B. JDublin, Ireland, and the response was overwhelmingly positive. In fact, after' v4 `# h% n8 n0 o8 |
Don presented the economic facts, many of these investors (who could invest
V: k& g* H; ?" Panywhere in the world) have already booked their flights to here. Once again9 B' P+ u# ]. X& i! N! u# \
proving that when the true numbers of our economy are presented (along with the+ h' n) o5 x3 v5 S
political stability of our country), there is no place in the world that can/ X" U/ x+ N0 u8 n" s; z
beat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely
6 R3 y$ F1 E/ `; G+ Ua sign of strong long-term fundamentals. RBC has also been following the job! j: s$ G* ^2 O J$ B, P+ R
creation situation and here is what they are saying: (www.rbc.com/economics)' C; d8 a- p) G# A
"After generating a substantial 96,700 jobs in May, the largest such gain since
# [9 \/ n# B% G" D9 r) hJanuary 2002, the economy lost a modest 4,600 jobs in June... # F9 \5 E4 a! s }4 n# R( m9 `
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the, }- Z: ~/ ~/ n0 r0 @, O
first half of 2006, a feat not matched since the second half of 2002. With the) Q' y+ a3 t+ K9 k- J
economy widely expected to grow at a more moderate pace in the second half of& q& e& _- D% X% u$ ~9 i
the year on the back of slowing trade activity, this impressive showing may not& @% E- n6 i- V; ^6 H4 l+ o( t
repeat itself. We expect that employment grew in July at a pace consistent with
& B2 s3 h: M& J/ c, `$ f# Hits recent trend of 24,000 jobs a month. Assuming that the labour force grew at
$ ^/ j0 H! w, X! I; S2 O; }its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
5 E$ Y2 k( h0 |of 6.1%." Overall very good news. Now the key is to ensure that the region in
+ R! G: o6 V6 Z. t2 }' iwhich you are investing is continuing to generate jobs and increasing incomes., A: n% B# i5 q c' S
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6 {, N8 y0 h# o4 Q) n. T lIn other words, it is a great time to be taking advantage of this strong) v" H# q% n1 a0 v T
economy, avoiding 'excuses' and to especially not listen to the uninformed
) s. b, F% s+ I'dream stealers.' As long as you stick with your game plan, you continue to do
2 d$ Z: `* W- w$ h9 pyour due diligence, and you remove emotions from the equation, you will see the
5 k9 n) S x L8 x! ]. x+ Z- eopportunities that are right in front of you, right here in Alberta. Let the
$ Q& q) u/ G y7 G8 h% x'dream stealers' call you 'lucky' 5 years from now as your net worth has soared X- }' _" C" [) e9 z/ e
and your financial freedom has surpassed even your wildest expectations.* ?9 `3 q K P: }, j
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0 x7 ?) v" u& F8 y4 fCapital Gains Comparison.
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5 `' |8 M$ W! d$ t0 D8 X# XKPMG has recently released a comparison of the true Top Federal and Provincial6 \4 L% K* f% E+ I* U2 ]
Marginal Capital Gains Tax Rates per province. It is very interesting to see
, Y3 Z) k( ^* s" `! Uhow these will affect your exit strategy. Here are the numbers:
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- J9 `2 U% i* z$ d# |BC . . . . . . . . 21.9%! v- ^8 ~# d: S
AB . . . . . . . . 19.5%; B) W) {0 J. c a+ \. s; H+ k
SK . . . . . . . . 22.0%
( m0 r3 t5 G; @% bMB . . . . . . . . 23.2%
; Q. z5 b: U6 x8 }9 N) m, J' dON . . . . . . . . 23.2%
; d6 w8 L$ o" rQC . . . . . . . . 24.1%
H9 B! R; h6 _$ f7 b( `) WNB . . . . . . . . 23.4%
2 h1 Y& x+ z& Y' E8 i3 U7 i$ QNS . . . . . . . . 24.1%
+ t) C5 `2 G, WPE . . . . . . . . 23.7%2 b' B) q% g) L- G! h- E7 E% d
NF . . . . . . . . 24.3%; U* v- B. P" K8 t" e. s! G* W( {
7 ]: D) Y! J0 V8 }* l: c9 \Lower capital gains tax increases investment and stimulates the long term' E' D3 j2 [% d- [4 u! p( C
economy of the province. It also allows real estate investors to keep more of
) }) E* J+ R4 ^- J# c+ J) b/ u+ Vtheir 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
( b5 J: a! o+ H8 j& Qopportunity to create financial freedom of which others can only dream. Of
e4 q8 u' _8 U0 K# \course, the key word is focus. And with an August line-up of 'Members Only'; {* S" [! U! J* [. n5 ~. [6 O( s
events like this, you can't help to become a real estate investment champion. H4 ]& d) D& E" D
when you take action as a full REIN Member.9 @2 Y6 a3 J% k) O* m$ ^
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the
% A7 M k/ U" w: d6 K% ^+ D) Xresults in just a few short years. |
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发表于 2006-8-25 08:35
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