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NEW HOUSING PRICE INDEX...
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6 c) r; n& g4 A6 A2 G! N T/ ]$ q, uThe New Housing Price Index, has just been released and it provides some very1 o |5 R5 L) y1 v
interesting insights, not only into where the market has moved, but where it0 g) x* z7 y M7 C. T; z" s+ h3 s
will be going.7 \' B8 \. ^0 M/ s8 t# \
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It proved, once again, the value of looking at fundamentals behind a market.
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0 y" N+ A3 _& K) E8 C) k. @3 QThe New Housing Price Index is compiled by Statistics Canada and is used by
/ K9 r, F7 T+ |2 z" R' D K' ksophisticated investors to see how much the market has moved, as well as an
n: u% }. e6 ~$ r7 C# F" ]indicator of where re-sale home prices will be moving in the coming six months.
1 T3 @+ f! P* W0 _' n* \We look at the ripple effect that new housing prices have on re-sale property
( N& y9 H* d- x. K; H/ _values and can extrapolate what direction re-sale prices will be moving and by& H3 Q6 e: ]; o
how much.
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For instance, for the last three years, we have told investors to avoid Windsor,/ K7 a# l( i5 _! s; i: H$ A
Ontario as an investment area because the underlying fundamentals are not very
1 \! E, B, I3 g9 ystrong. This has been proven once again with the release of the latest
+ W+ r; S" V) J* H! @findings. New Housing Prices have actually decreased by .5% during June 2005 -; K/ g4 B% z L4 F
June 2006 proving that fundamental investing works in helping you pick the best
& r) C' \: t0 o# K5 ^% w6 Tmarkets and avoid the flat ones. This .5% decrease should have little impact& [4 }0 h0 s2 K' T! w- T# m9 b' a9 l
on average re-sale values in the Windsor region.
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& O7 C5 t' F" v2 VTo contrast this, the fundamentals we discuss are so strong in Calgary that the0 |( A; i8 h* d( h4 `
market continues to be super heated. With close to 3,000 net new people into
; | w4 H. p9 N' W& T/ Z! h' pthe city every month, the property market just can't keep up. That is why we0 B1 J' J5 Q8 p- j1 b0 u0 {
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
" \& C: Q5 X+ X$ ~* G- H( K. Q# kThis is great news for the future of re-sale values in the city as these1 ]* T( R9 Z* b# } A
increases will continue to ripple out into the market for at least the next six& ?# Y w$ w _; }
months.
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Comparing these two regions is a great illustration of the value of not getting2 w1 L! S& u- i/ T
caught in the 'emotional guessing game' by just focusing on the underlying
2 Q$ W; l' Y5 s# y1 ifundamentals. It is sad to see those people who said in the last 2 years that* C: v3 {& ?/ y
the Alberta real estate market was over and they were going to sit back and wait
+ N6 Z) Q8 l+ K$ R! Q/ r9 x. ^until it drops. Quite obviously, they have missed out on AMAZING gains, all
9 ^ K( N1 g. r) c/ B+ ~ Bbecause they didn't follow fundamentals, they just led with their emotions.
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. O0 r2 E) e" n5 D6 E# yBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June1 M" G7 M3 T) {4 b) A3 v# o' g7 e
2005 to June 2006), also great news.& d% s8 |' [& Y/ l# `
' s& B' S2 {7 T/ P* UBy comparison across the country, these are the numbers for June 2005 - June& y2 t* n7 P) g S: |5 _! |. F
2006 New Housing Price Index for:
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Vancouver . . . . . . . . +5.2%
: _3 ^% Q* p% r8 c- a9 T6 ^* J! vSaskatoon . . . . . . . . +8.5%" }3 \0 p( \7 }- [1 Q
London . . . . . . . . . . . +3.0%4 s4 @% W# Y- e1 `% [0 J. m
Hamilton . . . . . . . . . . +4.9%. E4 X- y g. D& k# r- j8 h$ {
St. Catharines - Niagara . . . . +4.9%
$ V. s/ t m& N* y4 X! \# A( ^+ WToronto and Oshawa . . . . . . . +3.2
1 r, \2 c# l- I9 `Ottawa - Gatineau . . . . . . . . . +3.1%
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Fundamental investing ALWAYS makes you look like a genius - emotional investing6 S9 P& A2 M+ ]8 S4 W& @) ~2 b
gives you quick highs, but also quick lows. Well done on your focus!- e0 b" a; Z+ @8 ?5 F; ^7 \5 D! T
5 \+ K" ~ u4 i0 M p8 oAs the fundamentals have been showing all along, the Alberta market continues to! M4 e9 R" ]8 j3 u7 O( B( K
be strong, as in-migration and job creation continues to attract people from not
- A! t4 W8 I7 ~+ i4 Y% A. Honly across Canada, but from around the world. Our average wages are
/ Z* ^9 T" c9 W' E" {) jincreasing, our population is increasing, our unemployment rate continues to4 w# h: k. ~' z3 {" E
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 strong2 |2 X( D- e+ @7 t/ \- U
fundamentals:. }% W6 \8 v' V3 b, M0 S
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1. The Conference Board of Canada is forecasting strong economic growth in
+ K( ]) _ c2 ]Canada, with Alberta once again leading the way. In fact, the projected growth
' z' |5 H& R2 n5 l9 Ufor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and" w3 e" H A+ l% P& Q E
this 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 the& o( H. W8 H$ H$ I: y" _4 f
world. Recently, there have been investors coming here from Asia, Australia,
+ L! z, t0 z( w1 N) Fthe US, UK and Europe. In fact, if you review the world's press you will see3 u5 }, b2 n. M- m ?0 z
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 investment
5 r% [ f; C4 @; y) ?; y) Zatmosphere (including Why Alberta - Why Now") to a group of major investors in
1 J9 N5 Q+ A6 E6 rDublin, Ireland, and the response was overwhelmingly positive. In fact, after
" k a; }( b8 F/ I- p! e; u$ rDon presented the economic facts, many of these investors (who could invest9 i u. l, H* B o
anywhere in the world) have already booked their flights to here. Once again+ L3 Y. O3 b: l0 K$ o2 | c
proving that when the true numbers of our economy are presented (along with the% z i# M& _8 c) m Y& u7 j G/ ~8 A
political stability of our country), there is no place in the world that can0 d3 ~; B3 ]- Q" v( _7 H
beat it for long term investment.1 ~8 y! d8 y9 y1 i/ }1 `
, H3 R. z- ~( g0 k: r* E/ W. B4. Job creation continues to be strong (with a small lull in June); definitely& c6 O: \) A; i0 N* M5 b! ^
a sign of strong long-term fundamentals. RBC has also been following the job
: W" S3 m8 _0 a' Fcreation situation and here is what they are saying: (www.rbc.com/economics)
! d7 K" ?0 q! O# L% t"After generating a substantial 96,700 jobs in May, the largest such gain since
, T5 ?4 s! t& A" G( H! HJanuary 2002, the economy lost a modest 4,600 jobs in June... , j$ Q4 ^9 g2 l) S! n
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the
7 P. q! u+ N1 {- z/ Z' ~* Hfirst half of 2006, a feat not matched since the second half of 2002. With the
F: j% K5 _ T4 L* Q1 eeconomy widely expected to grow at a more moderate pace in the second half of% v* t5 ?( @+ D( t" l* q
the year on the back of slowing trade activity, this impressive showing may not& v1 {1 D; d! R' y0 R
repeat itself. We expect that employment grew in July at a pace consistent with
3 j' @0 X, x3 M0 @) Xits recent trend of 24,000 jobs a month. Assuming that the labour force grew at" \9 I' V0 P4 C! G
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate$ X4 C) d+ m3 o! Z& R
of 6.1%." Overall very good news. Now the key is to ensure that the region in- [0 x- X) r) G$ q% c
which you are investing is continuing to generate jobs and increasing incomes.
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; s6 j: H" d! e' d mIn other words, it is a great time to be taking advantage of this strong
. D6 o; B6 _( }$ }% K. Teconomy, avoiding 'excuses' and to especially not listen to the uninformed
, e9 @* [) |3 l# |/ T( n0 d" B8 L'dream stealers.' As long as you stick with your game plan, you continue to do, l+ D" Z" R3 j9 P
your due diligence, and you remove emotions from the equation, you will see the
# E& x! o: @: ^( ~; ?0 P2 |' oopportunities that are right in front of you, right here in Alberta. Let the/ s" _- V& R2 X3 y8 H' n( S+ \
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared& u8 I/ c; P7 i# }
and your financial freedom has surpassed even your wildest expectations.0 v6 Y! A6 z' M$ I% v$ g0 K2 A
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Capital Gains Comparison.
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KPMG has recently released a comparison of the true Top Federal and Provincial* V2 C, E% g. x) R, l
Marginal Capital Gains Tax Rates per province. It is very interesting to see; t% {. _ @/ K0 V6 q
how these will affect your exit strategy. Here are the numbers:6 D4 `" {/ e4 Y* U
5 `& f/ K$ n8 ]4 w& }; HBC . . . . . . . . 21.9%$ J% [5 V1 B* l' T' o6 y& C# g: u
AB . . . . . . . . 19.5%
' P) a8 E. j: y' `; rSK . . . . . . . . 22.0% o# d, t9 S6 [0 o8 p6 Y6 v: s
MB . . . . . . . . 23.2%
9 ?+ \) V1 H4 y* OON . . . . . . . . 23.2%
j1 o/ v& |8 c( X- Y5 IQC . . . . . . . . 24.1%1 ?& m J" `: a. s) t- ?* w ^, I
NB . . . . . . . . 23.4%* H N8 Z/ U! S& n+ g; h
NS . . . . . . . . 24.1%$ a: C. B/ R3 M- O1 |% L
PE . . . . . . . . 23.7%: D4 g5 s; p. o1 G' h* ]7 R7 X
NF . . . . . . . . 24.3%, I6 {' S8 V; t. q" o6 P8 J
3 }/ b9 B. t: q. ~Lower capital gains tax increases investment and stimulates the long term" Y7 R+ i r$ E6 m
economy of the province. It also allows real estate investors to keep more of# N/ z3 N& o' h' ~( {) w) R
their profits at exit time. Always a good number to pay attention to.
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$ D$ n1 z: j6 @; `4 E$ eOverall, by staying focused for the next short period of time, you have the( B& _6 F4 K1 G
opportunity to create financial freedom of which others can only dream. Of
7 e1 L" T8 Q& Kcourse, the key word is focus. And with an August line-up of 'Members Only'
: z9 l( l, Z: X5 [! h7 Pevents like this, you can't help to become a real estate investment champion
6 V$ t1 R2 c3 b s$ O0 [when you take action as a full REIN Member.' u+ u2 u4 A7 X
: D" s. X* Z! ?0 X6 NFocus on the fundamentals, keep emotions out of your decisions, and enjoy the
, x' B7 a3 Q/ Y0 P J5 ~results in just a few short years. |
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发表于 2006-8-25 08:35
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