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NEW HOUSING PRICE INDEX...+ C& g# V; S; k' Q+ Q2 a. ?
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The New Housing Price Index, has just been released and it provides some very
) B V6 b' S- d# ainteresting insights, not only into where the market has moved, but where it
! y z! c% Q) e6 x5 N( Z5 k: qwill be going.
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0 a3 T+ z4 \9 p+ Y4 _It proved, once again, the value of looking at fundamentals behind a market.
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8 i N9 r5 S5 W6 f6 V N/ DThe New Housing Price Index is compiled by Statistics Canada and is used by9 r1 ?/ C3 _, A- f/ o+ K
sophisticated investors to see how much the market has moved, as well as an( x: x, i8 g/ v, U8 f
indicator of where re-sale home prices will be moving in the coming six months. 1 e. Z: b$ W9 F
We look at the ripple effect that new housing prices have on re-sale property4 F" I7 i: n) ~" R2 B
values and can extrapolate what direction re-sale prices will be moving and by+ N' Q9 E- `1 n9 ~( D) `5 y( u! P
how much.
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& I1 v5 |8 ~( ~2 m' YFor instance, for the last three years, we have told investors to avoid Windsor,
3 B( H1 n$ H' q! Z4 H% }( X- `Ontario as an investment area because the underlying fundamentals are not very8 ~* `$ P( s4 Z) @
strong. This has been proven once again with the release of the latest- ?1 V4 G- r; s! I9 y% V
findings. New Housing Prices have actually decreased by .5% during June 2005 -
" S2 L/ v6 v8 q" W+ O& {& p5 O7 ~June 2006 proving that fundamental investing works in helping you pick the best, ?* K+ h! H3 n8 j
markets and avoid the flat ones. This .5% decrease should have little impact
, _) Q/ k+ L0 B5 I3 `) ^on average re-sale values in the Windsor region." ~' n5 `7 [# r, F# C: F
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To contrast this, the fundamentals we discuss are so strong in Calgary that the
. A1 z& M6 Q3 q0 c3 m5 A5 D2 J; Fmarket continues to be super heated. With close to 3,000 net new people into8 R- S# ^& V& _4 Z6 i: z3 E! e4 z
the city every month, the property market just can't keep up. That is why we
- B m" v& [4 W) asaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
2 x+ O: Y1 x9 C5 K; z E" MThis is great news for the future of re-sale values in the city as these
O3 m+ ^% P \0 i: fincreases will continue to ripple out into the market for at least the next six! }' o9 l% W- V) p% _2 H
months.
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5 a( r* f0 o4 _$ L! DComparing these two regions is a great illustration of the value of not getting
. F1 f& K% M5 r" Y" S# Ecaught in the 'emotional guessing game' by just focusing on the underlying% o+ |) }2 ~; E) j+ t) M
fundamentals. It is sad to see those people who said in the last 2 years that
: o! f5 |9 G* N6 K- r) l. \& P4 ?the Alberta real estate market was over and they were going to sit back and wait8 B" r D2 D Z: U- V) o! R& b: P* N
until it drops. Quite obviously, they have missed out on AMAZING gains, all
/ g( \. a ]2 b6 Fbecause they didn't follow fundamentals, they just led with their emotions.6 @* L. e l, Y) j5 n* U, c5 A
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
/ D; l. e: _7 Q; w0 |9 r( w2005 to June 2006), also great news.0 f9 d+ A! c5 m9 L- P% U. X9 U
: h8 g8 K9 p4 t( v; O8 EBy comparison across the country, these are the numbers for June 2005 - June8 h/ d$ t8 ?1 t3 W
2006 New Housing Price Index for:+ f0 A; ?; T( W2 e% B
7 I) R q" I/ W$ G$ l; B8 g( vVancouver . . . . . . . . +5.2%
4 V: G. u' ]$ n& l8 hSaskatoon . . . . . . . . +8.5%
+ g" J+ e' D; @9 O: b# @9 TLondon . . . . . . . . . . . +3.0%9 N2 }% U- @0 [) u, I* e/ i- g
Hamilton . . . . . . . . . . +4.9%2 M% {: U- J+ X$ q! Q3 x3 _7 h
St. Catharines - Niagara . . . . +4.9%
8 _& y1 j( P o$ MToronto and Oshawa . . . . . . . +3.25 I; P" A2 s* r X: Z. i8 i8 {
Ottawa - Gatineau . . . . . . . . . +3.1%9 s. u" R1 {3 J5 |: \( T E: V" H% F9 @
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Fundamental investing ALWAYS makes you look like a genius - emotional investing
x+ d/ ^ y* cgives you quick highs, but also quick lows. Well done on your focus!$ d( ~3 g+ H, ]& w0 J' g" X3 f
m3 v! A, `! l$ t: s' y0 KAs the fundamentals have been showing all along, the Alberta market continues to
- _6 ?; |9 q4 M `. Ube strong, as in-migration and job creation continues to attract people from not" V$ J* z8 L$ g7 `
only across Canada, but from around the world. Our average wages are' ^ T3 S% ~6 }2 i
increasing, our population is increasing, our unemployment rate continues to9 C8 ^9 u( l1 c6 U
drop and our GDP growth is slated to once again lead the country.
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, E! F5 G/ ]0 y+ A: nHere are some very interesting facts that are helping to support the strong# N, T4 W% h' q4 ], M+ }+ [
fundamentals:# `* B9 G- i" r+ i
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1. The Conference Board of Canada is forecasting strong economic growth in
0 Y; t2 a6 x% R% S: U6 gCanada, with Alberta once again leading the way. In fact, the projected growth3 K, @0 L- O# H9 b$ x
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and4 K# [" d) {" F) i- A7 {( f7 y9 @
this is slated to occur even with the labour shortages we are witnessing.2 l# T! ^4 I' k2 Q
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2. People are discovering Canada as an investment center from all over the
6 M6 A7 ^7 }) d. ]) V. D2 Nworld. Recently, there have been investors coming here from Asia, Australia,' h7 Z. s6 M2 x* a& I3 f8 l0 n3 a
the US, UK and Europe. In fact, if you review the world's press you will see8 }# K! R3 c6 x4 a- U' |
that Canada (with a focus on Alberta) is being discussed more frequently.
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/ ^, ^7 D0 C1 C3 y' H7 v3. Don Campbell has just returned from presenting our Canadian investment
6 o. D2 g; N: {" `atmosphere (including Why Alberta - Why Now") to a group of major investors in
: `& r4 q3 x! w0 }$ _Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
; l2 n& V4 N oDon presented the economic facts, many of these investors (who could invest9 E& }1 C8 L' Y. [9 K; n
anywhere in the world) have already booked their flights to here. Once again/ l3 N) g. c+ q0 I9 k+ ^: z6 m
proving that when the true numbers of our economy are presented (along with the; s) Z l$ u) f+ O3 ^
political stability of our country), there is no place in the world that can6 S% t5 ~& T- k8 I
beat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely; c2 @ a& d# U* T. ^
a sign of strong long-term fundamentals. RBC has also been following the job
R+ ~+ g9 z, Hcreation situation and here is what they are saying: (www.rbc.com/economics)# O1 \4 y2 ?- Q$ p5 |! _
"After generating a substantial 96,700 jobs in May, the largest such gain since
; }/ F; ~9 K$ r8 x1 oJanuary 2002, the economy lost a modest 4,600 jobs in June... 3 z9 ~* x5 B d8 G
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the' o* \9 P& c. Q/ ?' m- [6 I
first half of 2006, a feat not matched since the second half of 2002. With the* f3 H" u2 y# |, {" b+ t% i
economy widely expected to grow at a more moderate pace in the second half of) M3 a: k; D* U8 M2 \ \' C8 `
the year on the back of slowing trade activity, this impressive showing may not# P9 x- z0 g/ u: r ]$ _7 M
repeat itself. We expect that employment grew in July at a pace consistent with
+ Y+ |2 r8 _, c8 K- R0 kits recent trend of 24,000 jobs a month. Assuming that the labour force grew at
m# a- t: D/ f% O) R. vits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
+ u( Q( K6 H( `) z# Rof 6.1%." Overall very good news. Now the key is to ensure that the region in: U$ D9 f2 s0 c& n7 I
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 strong" X+ I. \8 K5 s' j' h
economy, avoiding 'excuses' and to especially not listen to the uninformed% p/ K& k9 W! H
'dream stealers.' As long as you stick with your game plan, you continue to do
/ b8 W2 U% |: @6 N# \your due diligence, and you remove emotions from the equation, you will see the
2 p# ~* a4 T* e6 }! Fopportunities that are right in front of you, right here in Alberta. Let the
2 B: {: n. S& d, n+ u. h- k, ]. `) R'dream stealers' call you 'lucky' 5 years from now as your net worth has soared" E: _; ]- j6 F9 I- e& A
and your financial freedom has surpassed even your wildest expectations.$ q" R) O2 O% a9 M9 h
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Capital Gains Comparison.! M! r2 a+ s7 P) ?; z: k4 C
( K: b1 W2 M ]6 r" v+ v- W9 }KPMG has recently released a comparison of the true Top Federal and Provincial
. N1 B/ ?+ S! hMarginal Capital Gains Tax Rates per province. It is very interesting to see
. o# J& I1 r% J3 thow these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%
7 ^* o5 K& h4 I O4 ` f- M* WAB . . . . . . . . 19.5%
' U* B) `6 R- ~7 t- M' b PSK . . . . . . . . 22.0%) [& p2 V) D( p" z/ m- n
MB . . . . . . . . 23.2%
2 H3 n6 }# d2 B7 ^/ cON . . . . . . . . 23.2%- v. k/ P7 H/ U( r8 R5 s# ]
QC . . . . . . . . 24.1%
z% |; U8 r8 ~0 F/ bNB . . . . . . . . 23.4%2 g6 {! ]1 t/ o! g3 l
NS . . . . . . . . 24.1%' V/ h" l. t: }5 B3 \% {+ m
PE . . . . . . . . 23.7%$ s, e: s& u) |. ~, ~0 j# M
NF . . . . . . . . 24.3%$ F/ {6 B8 J6 ^2 T! M& T6 p
$ P8 C; R* J" p* r1 FLower capital gains tax increases investment and stimulates the long term" {+ E' F: }/ }
economy of the province. It also allows real estate investors to keep more of. h. G5 ~, M; Q2 \+ }* K
their profits at exit time. Always a good number to pay attention to.1 z: ] n1 w7 c" ?
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Overall, by staying focused for the next short period of time, you have the9 \6 Q: |) b2 H) `; ~) Q* a- }
opportunity to create financial freedom of which others can only dream. Of- k. q. e5 s& }) m7 K4 r* R
course, the key word is focus. And with an August line-up of 'Members Only'1 q* q* g: E$ s. n: v9 P5 N8 J7 }+ m
events like this, you can't help to become a real estate investment champion
4 u( D5 X) U& B/ qwhen you take action as a full REIN Member.
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the
$ y% i2 d8 F* |7 Xresults in just a few short years. |
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发表于 2006-8-25 08:35
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