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NEW HOUSING PRICE INDEX...
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2 W( v: ] [2 X5 y, x3 A( v# XThe New Housing Price Index, has just been released and it provides some very
2 ~6 L* H3 b* j. L8 Q+ w. \interesting insights, not only into where the market has moved, but where it
% @2 @0 D8 h# Y' ?8 Dwill be going.
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It proved, once again, the value of looking at fundamentals behind a market.
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# g' v3 F0 [8 e8 K+ y1 SThe New Housing Price Index is compiled by Statistics Canada and is used by
7 j: }9 y. a0 t5 T- f; Osophisticated investors to see how much the market has moved, as well as an) L' A+ x8 R/ P% X9 I! c0 ~
indicator of where re-sale home prices will be moving in the coming six months. ( ~6 r, O+ V; T. K# ]
We look at the ripple effect that new housing prices have on re-sale property
, b' V1 `' n- F. _4 e6 a6 Tvalues and can extrapolate what direction re-sale prices will be moving and by! c* y% W# U# n+ h; N& N
how much.2 `, C$ n2 v2 A' \
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For instance, for the last three years, we have told investors to avoid Windsor,
* Y0 C" l+ {$ T* f3 oOntario as an investment area because the underlying fundamentals are not very( I- n2 C8 V: i6 k% Z
strong. This has been proven once again with the release of the latest2 I6 p. B- Y' l% O D* j: ?) [
findings. New Housing Prices have actually decreased by .5% during June 2005 -; y0 o- \3 E( s' ~$ U
June 2006 proving that fundamental investing works in helping you pick the best
( H( P U4 {# R& w* vmarkets and avoid the flat ones. This .5% decrease should have little impact# v" K! d/ V2 N" k7 q2 n3 f0 e0 g
on average re-sale values in the Windsor region.: D& C( {. f- J' U z; [9 w# F
6 u' B$ u2 S; q \! A/ k' [To contrast this, the fundamentals we discuss are so strong in Calgary that the
; }0 i# h5 O( J; I$ i" W- f) J3 Bmarket continues to be super heated. With close to 3,000 net new people into; I% W5 z. [: n/ f! [! L* H
the city every month, the property market just can't keep up. That is why we5 b! Z' l1 |, r8 |. \5 o
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). " k. L$ {6 \2 H
This is great news for the future of re-sale values in the city as these
+ p3 M' f' y# h# t4 T7 \increases will continue to ripple out into the market for at least the next six/ d2 R5 u, t# I" X; V4 H
months.
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Comparing these two regions is a great illustration of the value of not getting$ m" M [4 G$ [; l2 y9 r! e+ p
caught in the 'emotional guessing game' by just focusing on the underlying
/ A& ^8 L6 q* ? \3 X, O4 h4 kfundamentals. It is sad to see those people who said in the last 2 years that) f8 _- `# \8 x( g! \
the Alberta real estate market was over and they were going to sit back and wait
. {* e9 C E. }# X) Huntil it drops. Quite obviously, they have missed out on AMAZING gains, all" g9 M- B8 i! J. {. E9 v9 S( d- B" X
because they didn't follow fundamentals, they just led with their emotions.% g7 e: i- K2 y+ L2 v% A
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June; ^% s% k! u9 B9 {
2005 to June 2006), also great news.6 g( l; D) H8 N \! E' v8 |$ p
1 T: q7 g% A2 f5 d8 h( ]- WBy comparison across the country, these are the numbers for June 2005 - June& A" d: U$ U! h; X5 N4 p
2006 New Housing Price Index for:+ L2 J3 g# {9 r, ^* A1 \5 D
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Vancouver . . . . . . . . +5.2%
1 r! B; v( L& y. \0 P8 E- FSaskatoon . . . . . . . . +8.5%7 W7 q9 u5 n; K- v: D
London . . . . . . . . . . . +3.0%7 b2 X; ~/ H" {4 c7 z6 }4 o7 a
Hamilton . . . . . . . . . . +4.9%
) a a$ K" |4 `% U3 d$ B# SSt. Catharines - Niagara . . . . +4.9%2 E7 S) |( o: L0 Z
Toronto and Oshawa . . . . . . . +3.20 `+ @' `" F5 l
Ottawa - Gatineau . . . . . . . . . +3.1%/ f% j! n3 Y4 |/ E
' I8 L: r5 \" @9 D$ {7 V9 ZFundamental investing ALWAYS makes you look like a genius - emotional investing G E2 e5 F$ y; Q3 q& n7 g( I8 q
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 to
" p* L. Z+ v9 b8 l& U; b! lbe strong, as in-migration and job creation continues to attract people from not
" ?. d' z1 V: V Uonly across Canada, but from around the world. Our average wages are
}6 W2 H1 t. x' ~# B. `7 T, |1 R# _1 @increasing, our population is increasing, our unemployment rate continues to+ p1 k" l8 g; y/ w) D2 P
drop and our GDP growth is slated to once again lead the country.
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2 i- B9 v- l AHere are some very interesting facts that are helping to support the strong
- G7 r/ e% Q! ]fundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in1 g& t% g, [$ \ ?
Canada, with Alberta once again leading the way. In fact, the projected growth/ O$ K N3 g% M o6 @ B, k
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and+ C5 q8 V2 p+ f, g, W
this is slated to occur even with the labour shortages we are witnessing.3 g. q: a2 Z3 \
9 h. u; a) {, i& U5 _2. People are discovering Canada as an investment center from all over the$ _! z: O, ~8 |! c" t
world. Recently, there have been investors coming here from Asia, Australia,' q; I4 l+ C2 A+ M3 h7 h
the US, UK and Europe. In fact, if you review the world's press you will see
* [1 x8 E& X" Z6 ^that Canada (with a focus on Alberta) is being discussed more frequently. 7 w( w4 T5 P' ]/ d6 d0 M
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3. Don Campbell has just returned from presenting our Canadian investment
4 Z% E: D& G$ L- f+ A6 oatmosphere (including Why Alberta - Why Now") to a group of major investors in
' y |7 B- S4 M7 n5 r% dDublin, Ireland, and the response was overwhelmingly positive. In fact, after
5 A! H9 e$ m7 {Don presented the economic facts, many of these investors (who could invest
0 T4 p5 p) s; Y% Z# D, R3 hanywhere in the world) have already booked their flights to here. Once again- ?8 `2 P/ t0 z9 }( o0 i, @9 b0 J
proving that when the true numbers of our economy are presented (along with the; u: O7 a+ T: ^/ Z* @
political stability of our country), there is no place in the world that can* w+ |( s6 o3 m& o
beat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely: o. T: e/ U. U# p+ ?) E
a sign of strong long-term fundamentals. RBC has also been following the job
6 j- ?; M6 M. Zcreation situation and here is what they are saying: (www.rbc.com/economics)
D) C- ~6 x" W* \% M J/ c"After generating a substantial 96,700 jobs in May, the largest such gain since
- L% |+ z* ^0 b4 fJanuary 2002, the economy lost a modest 4,600 jobs in June...
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" P6 P; q- [. EStrength in the Canadian economy contributed to a gain of 215,600 jobs in the
( ]) m6 g) S* v# x. nfirst half of 2006, a feat not matched since the second half of 2002. With the
* T! a6 `7 c" m; g8 Y% e! g2 Keconomy widely expected to grow at a more moderate pace in the second half of: m4 R8 t* i3 {. L4 c% K
the year on the back of slowing trade activity, this impressive showing may not
: w3 Y: `+ y% j" Y2 mrepeat itself. We expect that employment grew in July at a pace consistent with
]2 \2 j, g3 Tits recent trend of 24,000 jobs a month. Assuming that the labour force grew at4 r4 ^% Z7 n) K2 Y( U5 E& M; A
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
, N# u0 l; C1 t6 v C2 \1 J1 Mof 6.1%." Overall very good news. Now the key is to ensure that the region in7 T/ C) u9 @; e* b H
which you are investing is continuing to generate jobs and increasing incomes.
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In other words, it is a great time to be taking advantage of this strong9 r- U8 j6 C9 k
economy, avoiding 'excuses' and to especially not listen to the uninformed" u7 G4 w, h# W6 N
'dream stealers.' As long as you stick with your game plan, you continue to do
: B _- ^5 q- u) f, Z) _your due diligence, and you remove emotions from the equation, you will see the
; E& J( B7 e: L5 z- Mopportunities that are right in front of you, right here in Alberta. Let the
2 W, Z P& V8 b- G: N& a$ ?'dream stealers' call you 'lucky' 5 years from now as your net worth has soared1 F# {- Q2 Z8 b# Z5 L9 k# H* g' \" H
and your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison.
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9 a. M ^& m. g4 n8 j1 } X! JKPMG has recently released a comparison of the true Top Federal and Provincial
: |' p- m! O+ @' L9 M( E V9 bMarginal Capital Gains Tax Rates per province. It is very interesting to see
- d: F, p/ z6 h& Qhow these will affect your exit strategy. Here are the numbers:
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/ Z6 Y: t% Q' R) n; sBC . . . . . . . . 21.9%
# ]" }0 X+ C) p5 BAB . . . . . . . . 19.5%
; w+ t$ i5 ^+ ~: U6 rSK . . . . . . . . 22.0%* l/ F& F- ]4 G" m6 u
MB . . . . . . . . 23.2%
& w9 }6 G4 K2 }( } hON . . . . . . . . 23.2%1 ^; i4 l9 a/ e
QC . . . . . . . . 24.1%
) t# P* T0 M5 w! V& p( _NB . . . . . . . . 23.4%
6 \+ t/ Q" v0 ONS . . . . . . . . 24.1%" f) W) F% c' v/ d
PE . . . . . . . . 23.7%$ r9 ]3 z0 L5 d/ n) Z+ i: I" P
NF . . . . . . . . 24.3%
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Lower capital gains tax increases investment and stimulates the long term; h0 H* d) F$ v' c2 ?; Y
economy of the province. It also allows real estate investors to keep more of
* x1 K+ u) ]4 {6 l$ m% ^5 `their profits at exit time. Always a good number to pay attention to.
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4 L# b, e& c* H: G) lOverall, by staying focused for the next short period of time, you have the
% }7 C: ^* D$ Q) Zopportunity to create financial freedom of which others can only dream. Of
+ o9 J& V: V4 |, z9 p' bcourse, the key word is focus. And with an August line-up of 'Members Only'
2 H( v8 M9 M( ^0 V) Mevents like this, you can't help to become a real estate investment champion
- z# }! ?3 G2 h1 R6 Xwhen you take action as a full REIN Member.. i& z, }/ e, a) a. B* d; Y
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the r8 @& u6 S$ b9 T
results in just a few short years. |
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发表于 2006-8-25 08:35
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