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NEW HOUSING PRICE INDEX...
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The New Housing Price Index, has just been released and it provides some very& V4 E/ c7 M# ~0 O, [0 H
interesting insights, not only into where the market has moved, but where it- @6 \% c2 A5 `
will be going.
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It proved, once again, the value of looking at fundamentals behind a market.
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The New Housing Price Index is compiled by Statistics Canada and is used by
5 |9 s, d' r+ V2 ^sophisticated investors to see how much the market has moved, as well as an _6 Z7 c. i7 b
indicator of where re-sale home prices will be moving in the coming six months.
/ ]# g I2 d& m- BWe look at the ripple effect that new housing prices have on re-sale property a' g7 A, s2 F# u q- z- Y
values and can extrapolate what direction re-sale prices will be moving and by
7 n3 c9 Q: h& ahow much.! t0 V- A% Z6 d2 X
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For instance, for the last three years, we have told investors to avoid Windsor,
. x% H2 ]$ f5 ~! XOntario as an investment area because the underlying fundamentals are not very
9 \6 y3 }" j3 b, G: B+ z' \1 ]strong. This has been proven once again with the release of the latest B8 @1 {5 I2 Z4 K: G2 K
findings. New Housing Prices have actually decreased by .5% during June 2005 -, M1 t' o" |. A
June 2006 proving that fundamental investing works in helping you pick the best
* i3 n; k6 s" D/ G% u @markets and avoid the flat ones. This .5% decrease should have little impact+ V+ _/ l4 d- V3 o
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( T {! { B6 ^# L) |) ?8 ^! N5 V
market continues to be super heated. With close to 3,000 net new people into
, ]* k9 J! \5 E' sthe city every month, the property market just can't keep up. That is why we7 t2 i7 j, E- M" g' \7 @) b
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). 7 y4 }0 @3 m3 J1 p& V- Y$ \
This is great news for the future of re-sale values in the city as these
6 \0 G, Y* N9 c1 A9 P- Oincreases will continue to ripple out into the market for at least the next six
3 C8 t4 _, r2 @" R1 W, [months.
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2 G2 r" c3 j w+ k. gComparing these two regions is a great illustration of the value of not getting
6 s5 {) t/ ?& R m: c" fcaught in the 'emotional guessing game' by just focusing on the underlying4 t |) y* R9 U! \( e
fundamentals. It is sad to see those people who said in the last 2 years that
6 E) V# ?& b; {5 K& K6 Vthe Alberta real estate market was over and they were going to sit back and wait; l; w: t$ R: e8 g0 u4 K% k
until it drops. Quite obviously, they have missed out on AMAZING gains, all
% ]; U; f: P; ?because they didn't follow fundamentals, they just led with their emotions." Z. C: L7 t+ i( ~* p/ y9 F
" Q( {2 B" @6 m/ j+ Y- R& fBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
& ^7 K; [0 H6 Q. O2005 to June 2006), also great news.
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8 b. ^, G1 b. N( k3 VBy comparison across the country, these are the numbers for June 2005 - June
K/ g6 Z; Q" V) V) k- k5 E- O2006 New Housing Price Index for:
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Vancouver . . . . . . . . +5.2%% ]4 J1 ?' x! p% m' S l
Saskatoon . . . . . . . . +8.5%
6 S8 a( \/ Z9 y$ @& DLondon . . . . . . . . . . . +3.0%3 s* T; a% Q/ ?' F+ K
Hamilton . . . . . . . . . . +4.9%
3 d& y6 m. Z E- oSt. Catharines - Niagara . . . . +4.9%
' f- Q. c. Z" q) R1 H7 Y, S' FToronto and Oshawa . . . . . . . +3.2
5 |' r t, r: l$ v# e ^Ottawa - Gatineau . . . . . . . . . +3.1%0 q4 l2 l7 [6 f. k/ f L0 M
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Fundamental investing ALWAYS makes you look like a genius - emotional investing
) n7 s$ i- d: e0 m/ {9 lgives you quick highs, but also quick lows. Well done on your focus!" G+ I# Y6 ?/ ~( X L5 |6 f
) N3 v: x# b7 |3 c: f* GAs the fundamentals have been showing all along, the Alberta market continues to. A- t" P2 x E: \
be strong, as in-migration and job creation continues to attract people from not
/ [$ u' `& s, }5 F- N R |only across Canada, but from around the world. Our average wages are( Y0 J' A/ ]. m6 ]
increasing, our population is increasing, our unemployment rate continues to! O$ v2 q, @7 O" D, g; I& f+ t. K2 W4 M
drop and our GDP growth is slated to once again lead the country.1 I3 ]9 w2 y5 a- Y4 t8 {3 N- v
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Here are some very interesting facts that are helping to support the strong+ t$ ~3 a3 a$ B5 c) ]; L2 t; F0 i
fundamentals:
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3 I o1 R! v+ b1. The Conference Board of Canada is forecasting strong economic growth in
. b# I0 e* _; Q1 R( dCanada, with Alberta once again leading the way. In fact, the projected growth; F R! t& J. |" N
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and) I9 E$ w% b8 Y. q- A8 b
this is slated to occur even with the labour shortages we are witnessing.* a. B( p( r3 T& ?: r! D% `
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2. People are discovering Canada as an investment center from all over the, C# S1 j; \( \, P8 z" M# L
world. Recently, there have been investors coming here from Asia, Australia,# K7 a) n( k& B* V, s( e" }% T
the US, UK and Europe. In fact, if you review the world's press you will see
: l/ n, w5 F- ^& }% r; Vthat 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
! t- l; a5 j3 y2 n% R# f0 [5 Qatmosphere (including Why Alberta - Why Now") to a group of major investors in
_2 L( y4 G4 E6 V5 o# M/ `Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
6 U+ ?- B6 `; i9 ?0 Y( qDon presented the economic facts, many of these investors (who could invest, q+ y' v$ V8 H+ C9 S: w: j: I# T' }
anywhere in the world) have already booked their flights to here. Once again$ H1 k' {# A Q& d2 H
proving that when the true numbers of our economy are presented (along with the$ X( g: P. S( F# N
political stability of our country), there is no place in the world that can
, O2 a7 ]' J* Lbeat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely
1 X6 L! v# R6 U$ ]" z/ d r) |4 _a sign of strong long-term fundamentals. RBC has also been following the job8 X( ^, @8 s4 z; e
creation situation and here is what they are saying: (www.rbc.com/economics)
2 j& z# `; h# u# b9 j6 J: c% I l$ V- J% G; B"After generating a substantial 96,700 jobs in May, the largest such gain since
$ L; p/ T) G6 Y7 [! mJanuary 2002, the economy lost a modest 4,600 jobs in June...
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the
( ] Q7 Z1 p; j2 ^first half of 2006, a feat not matched since the second half of 2002. With the1 l' Z" ?/ J" O W* m
economy widely expected to grow at a more moderate pace in the second half of
1 d1 Q( U C1 m% ~the year on the back of slowing trade activity, this impressive showing may not
1 M% E2 w) }$ P$ J Irepeat itself. We expect that employment grew in July at a pace consistent with7 x& K3 _: D% K) ^
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
, x0 ]) r" i7 Mits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate: H e6 h4 ?1 G4 n- I$ Y0 v( m
of 6.1%." Overall very good news. Now the key is to ensure that the region in
3 j6 M: a% z1 F# K9 E+ D4 x( _0 ewhich 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
' m* |, E+ H E) veconomy, avoiding 'excuses' and to especially not listen to the uninformed* b0 h( R3 k o7 E/ ]
'dream stealers.' As long as you stick with your game plan, you continue to do
& x6 V: k4 G/ G+ c" gyour due diligence, and you remove emotions from the equation, you will see the
; v5 \" n2 l. A9 c2 e, v/ J" f$ `opportunities that are right in front of you, right here in Alberta. Let the& s- ^, d U8 r7 S& f
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared! o( L: p B" h5 h) v( C
and your financial freedom has surpassed even your wildest expectations.
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9 ~/ s% _$ ]0 h) f: {1 lCapital Gains Comparison.
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/ Z9 E! y0 w6 J5 V* ~; J6 _KPMG has recently released a comparison of the true Top Federal and Provincial, d2 r4 }% L) @1 W4 Z
Marginal Capital Gains Tax Rates per province. It is very interesting to see0 o/ R7 T B( g
how these will affect your exit strategy. Here are the numbers:9 @% [0 o) W) q# u# Y6 X
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BC . . . . . . . . 21.9%. s" \3 L; k3 w3 I) V9 O, y a
AB . . . . . . . . 19.5%2 B- s% Y( ]4 N2 A8 h1 C
SK . . . . . . . . 22.0%
, O: k6 z6 s0 O1 j% wMB . . . . . . . . 23.2%+ F& D$ w# R I) S
ON . . . . . . . . 23.2%
; ~4 I0 k7 L: y( L$ E: B4 wQC . . . . . . . . 24.1%
6 n" j9 E* c% DNB . . . . . . . . 23.4%
* {' P7 @' q5 g- W0 w0 J- L0 PNS . . . . . . . . 24.1%8 I' ~& Q3 h6 b
PE . . . . . . . . 23.7%
2 y+ o3 ^$ `0 U# e8 w2 c Q1 m9 r/ SNF . . . . . . . . 24.3%
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# i* V1 |: q4 \7 g: GLower capital gains tax increases investment and stimulates the long term
3 I H6 p; j1 _& yeconomy of the province. It also allows real estate investors to keep more of" Y' Z+ x+ Z; q4 C( _; D
their 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
5 ]+ i' V/ |2 H- q9 {opportunity to create financial freedom of which others can only dream. Of
/ r- X8 K4 d H3 f. o! y$ Mcourse, the key word is focus. And with an August line-up of 'Members Only'/ e6 V& j; G' y
events like this, you can't help to become a real estate investment champion
2 F1 ^; l& I6 w. kwhen 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
6 K$ D) r. r4 Zresults in just a few short years. |
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发表于 2006-8-25 08:35
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