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NEW HOUSING PRICE INDEX.../ Q/ q) D( P" c; F( p" d) i4 N' Y
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( |$ P5 o M7 @3 v# gThe New Housing Price Index, has just been released and it provides some very# G4 p4 L" o$ ~3 O- w4 t$ C) `
interesting insights, not only into where the market has moved, but where it
5 X: x4 r) M& a9 m* k: o5 b) N# pwill be going.6 u; C# ^5 l( q( H# s1 e% V
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It proved, once again, the value of looking at fundamentals behind a market.
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( P- ~4 E/ t) o {: k2 yThe New Housing Price Index is compiled by Statistics Canada and is used by6 E/ m9 m g% z; h. f# h
sophisticated investors to see how much the market has moved, as well as an+ z3 E: k6 K9 U: r
indicator of where re-sale home prices will be moving in the coming six months.
$ i) L7 ?, w, ^We look at the ripple effect that new housing prices have on re-sale property* n6 N4 Q* W* z4 _4 U% m
values and can extrapolate what direction re-sale prices will be moving and by" o- n9 e# d4 n3 r+ Q) O
how much.8 {3 c# s! A: v/ x6 x G C
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For instance, for the last three years, we have told investors to avoid Windsor,
1 n/ e# p# x; J+ JOntario as an investment area because the underlying fundamentals are not very
- P( O9 j2 q2 D' U$ z, B" f( ^4 M5 Gstrong. This has been proven once again with the release of the latest( `# ~, B# z$ ~
findings. New Housing Prices have actually decreased by .5% during June 2005 -: W0 r6 |2 x0 I% o6 C
June 2006 proving that fundamental investing works in helping you pick the best
' U H# [8 l! k! b% J$ A% [( F. Rmarkets and avoid the flat ones. This .5% decrease should have little impact
; j3 u; D$ B9 |on average re-sale values in the Windsor region.
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To contrast this, the fundamentals we discuss are so strong in Calgary that the
7 {! @! X# z/ i4 w( hmarket continues to be super heated. With close to 3,000 net new people into8 L/ A3 p1 h( {9 e; R$ S( u$ X
the city every month, the property market just can't keep up. That is why we
& L& C8 j- `7 b5 d7 V% ?0 }" hsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
1 F! g7 O: @; I# e; Q2 k6 ?# YThis is great news for the future of re-sale values in the city as these( q4 S* l! |# i% @
increases will continue to ripple out into the market for at least the next six! c$ T0 n/ Q3 r1 w! u
months. 6 s( y( C3 ~: S* f3 d: N, E. a g
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Comparing these two regions is a great illustration of the value of not getting8 r# [/ O# E8 E/ w
caught in the 'emotional guessing game' by just focusing on the underlying
% D. a$ K( k( W% P0 _$ Q7 c, pfundamentals. It is sad to see those people who said in the last 2 years that: b9 D N* S2 J! ^( n
the Alberta real estate market was over and they were going to sit back and wait, M+ Y( H, K1 V
until it drops. Quite obviously, they have missed out on AMAZING gains, all" M5 T) q) P) U1 [% B" w% S
because they didn't follow fundamentals, they just led with their emotions.9 Y) N" e: S* Z4 N8 q
- r" q: A/ K" [: B. xBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June8 s. X: ]! H ~
2005 to June 2006), also great news.! W8 ~, a3 O3 U# g% b ~7 ~
* H+ d- \+ w1 h8 V0 d6 fBy comparison across the country, these are the numbers for June 2005 - June4 E( b- X7 [4 j. a& z+ h
2006 New Housing Price Index for:" I9 @7 {% k5 d3 y7 T
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Vancouver . . . . . . . . +5.2%
0 p) G4 x( h( } e) G4 `+ y) G" |# R3 OSaskatoon . . . . . . . . +8.5%
; i8 J c2 t; v( OLondon . . . . . . . . . . . +3.0%7 M5 y4 i- d( h5 z6 f/ g* k; _
Hamilton . . . . . . . . . . +4.9%
, }& k& F9 C) e8 z9 S% o" Y0 ]St. Catharines - Niagara . . . . +4.9%
! c/ S o. S# Y R7 u: R5 tToronto and Oshawa . . . . . . . +3.2
! R# n7 y) i: kOttawa - Gatineau . . . . . . . . . +3.1%9 c6 W9 e* Y9 d9 l! s z8 A' q K* ?, o
6 R/ q. ?$ C3 F( L; d8 ?Fundamental investing ALWAYS makes you look like a genius - emotional investing4 V/ U$ H* d7 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; z/ r- C3 U. \2 G, W6 c) O( ~
be strong, as in-migration and job creation continues to attract people from not- G3 M- k5 I$ F$ j
only across Canada, but from around the world. Our average wages are
" Z9 p/ ]: Q) x2 h( e6 ]increasing, our population is increasing, our unemployment rate continues to. B/ s! @4 q& l; X
drop and our GDP growth is slated to once again lead the country.+ W% J: q6 _ n0 _; G+ u+ w, N- F6 x
: {- T4 Q0 `5 WHere are some very interesting facts that are helping to support the strong2 |( Y1 E) X. G0 s" _
fundamentals:3 |% ~# l& o1 j
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1. The Conference Board of Canada is forecasting strong economic growth in0 f- B. M# i: `4 F
Canada, with Alberta once again leading the way. In fact, the projected growth
, O( I- S7 g7 i; o! U; R" wfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
) |" N' ^3 t$ i' Q: ~$ i5 H3 M Gthis is slated to occur even with the labour shortages we are witnessing.( ]+ M3 k( H6 t
" G, ?5 b& Q, k+ [" c2. People are discovering Canada as an investment center from all over the7 ]# K: C) }4 `) ?/ ~# |
world. Recently, there have been investors coming here from Asia, Australia,
2 c0 b+ v) z; i6 y! @the US, UK and Europe. In fact, if you review the world's press you will see
2 D' }' a* n% ?that Canada (with a focus on Alberta) is being discussed more frequently. / M5 N, O, P0 H! C. [" F" U7 |
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3. Don Campbell has just returned from presenting our Canadian investment
" J4 l+ P/ J C. E2 R, |- @% U) i1 Hatmosphere (including Why Alberta - Why Now") to a group of major investors in* Z; D: v" a& t' n
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
4 \1 y3 S: P$ K# hDon presented the economic facts, many of these investors (who could invest
# Y+ ^+ v' J4 A t- o/ ~; banywhere in the world) have already booked their flights to here. Once again
& K9 z' E" s) \+ q" k# Gproving that when the true numbers of our economy are presented (along with the
7 I3 G: ^ X. R$ v. Kpolitical stability of our country), there is no place in the world that can
5 D0 Q% G' M1 m6 g% l2 G! Ubeat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely
& [$ k4 P ~8 ^7 J$ l& fa sign of strong long-term fundamentals. RBC has also been following the job" u% I3 M9 N2 a* |8 h `, v4 L" F5 l
creation situation and here is what they are saying: (www.rbc.com/economics)+ [4 n" K. g+ _9 _
"After generating a substantial 96,700 jobs in May, the largest such gain since F8 h2 I/ J5 Y8 T- |
January 2002, the economy lost a modest 4,600 jobs in June... 9 l" ?" P7 o) c B4 p
3 T+ V9 C' \/ H3 F: C8 o7 m- [9 JStrength in the Canadian economy contributed to a gain of 215,600 jobs in the2 S, E* w8 `- S1 U# r
first half of 2006, a feat not matched since the second half of 2002. With the
. r h5 V' j8 u" B% T" Teconomy widely expected to grow at a more moderate pace in the second half of
: ^0 J2 A3 v2 dthe year on the back of slowing trade activity, this impressive showing may not% F- ?/ W* W9 S9 A& N
repeat itself. We expect that employment grew in July at a pace consistent with
1 \" S {1 u: f% g; I) f Iits recent trend of 24,000 jobs a month. Assuming that the labour force grew at9 d& \/ C8 F( X2 ~3 l
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate% P: o# D0 g3 m5 J
of 6.1%." Overall very good news. Now the key is to ensure that the region in2 W" B( z# C& A. v3 B
which you are investing is continuing to generate jobs and increasing incomes.( f- N: e) K5 e# b& i$ u/ `1 D
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/ Y5 ~1 ^+ z- o( y3 n: ZIn other words, it is a great time to be taking advantage of this strong
, E8 G' }+ n: p$ E( m0 |economy, avoiding 'excuses' and to especially not listen to the uninformed
0 B7 D& l5 U" n( J6 \3 L7 @'dream stealers.' As long as you stick with your game plan, you continue to do& m, a' Y& c L9 Y
your due diligence, and you remove emotions from the equation, you will see the
4 P( K) b* k# q) Bopportunities that are right in front of you, right here in Alberta. Let the2 \/ I2 P8 w1 R% C5 m9 F% p1 i4 N7 c
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared Z% q" P: y9 q+ ^
and your financial freedom has surpassed even your wildest expectations.
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6 }/ h& z, Q( a/ P$ eCapital Gains Comparison.
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KPMG has recently released a comparison of the true Top Federal and Provincial Q* J% j* N; a; Q4 x
Marginal Capital Gains Tax Rates per province. It is very interesting to see2 p. u( [, q$ A! }' q
how these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%1 E" \% y$ b9 A0 s% a8 U
AB . . . . . . . . 19.5%8 o% ^: E" h* }, }* e" K6 }
SK . . . . . . . . 22.0%) K- S% }6 Z6 I4 N; `. Z/ ~9 X7 N
MB . . . . . . . . 23.2%. l' ^/ P& U$ _! ?( H
ON . . . . . . . . 23.2%
C. D+ _$ y" d, ~QC . . . . . . . . 24.1%
& g9 V: u: p- C) h5 B3 J8 {+ L( }NB . . . . . . . . 23.4%& a& }5 l9 U/ F4 Q$ L* c
NS . . . . . . . . 24.1%* J$ k: \3 \2 A6 A/ d
PE . . . . . . . . 23.7%" f1 f' F; L" P* i" j- _6 x
NF . . . . . . . . 24.3%
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Lower capital gains tax increases investment and stimulates the long term- h" C, Y7 J0 I0 n/ D
economy of the province. It also allows real estate investors to keep more of: q0 Z$ @4 v0 y! d
their profits at exit time. Always a good number to pay attention to.# e/ @5 `" u* X7 v- y3 H
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; @) ]5 Z* Y+ w2 fOverall, by staying focused for the next short period of time, you have the( P' O3 y! ~/ M3 y h! {! k1 c3 O
opportunity to create financial freedom of which others can only dream. Of6 |* P7 S7 m6 _8 i2 _; n
course, the key word is focus. And with an August line-up of 'Members Only', V( @6 g' e1 w! I# o5 K% V
events like this, you can't help to become a real estate investment champion3 \5 T! v# U# }0 ^/ a$ ^* ]1 W, I4 u& L
when you take action as a full REIN Member./ v+ n: U+ n5 |4 a M! \
" S5 D4 C3 F0 J4 B. RFocus on the fundamentals, keep emotions out of your decisions, and enjoy the& z! k! x0 w7 y$ X+ s& V2 A( C
results in just a few short years. |
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发表于 2006-8-25 08:35
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