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NEW HOUSING PRICE INDEX...2 k/ z" E/ f/ T0 n$ g# Z, P
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The New Housing Price Index, has just been released and it provides some very+ U r j% t4 p9 O
interesting insights, not only into where the market has moved, but where it
l* S$ O5 K& {3 J6 Hwill be going.- W2 e/ P9 a4 Y9 i- o& x/ \0 Y
4 R5 C9 }8 W+ c/ zIt proved, once again, the value of looking at fundamentals behind a market.
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8 Y; ^8 \7 E2 x; w& L) `The New Housing Price Index is compiled by Statistics Canada and is used by2 ~, g5 W; U: J6 Q+ k$ n( i4 K7 B
sophisticated investors to see how much the market has moved, as well as an
8 {9 M9 [) ^1 ?- l9 Vindicator of where re-sale home prices will be moving in the coming six months.
7 r2 o: N, {8 l4 m, j9 |( E& F GWe look at the ripple effect that new housing prices have on re-sale property
0 R, }0 M# n, ~! i0 _values and can extrapolate what direction re-sale prices will be moving and by2 c/ Q$ K1 d! i/ Y+ p, U H
how much.
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For instance, for the last three years, we have told investors to avoid Windsor,, o, X! V2 ~! S. N5 K- r+ l
Ontario as an investment area because the underlying fundamentals are not very; [5 Q3 i& i, s& p/ j( }
strong. This has been proven once again with the release of the latest! J1 B1 B: i- G7 M( A
findings. New Housing Prices have actually decreased by .5% during June 2005 -5 o6 [$ f& \; f b( {2 X
June 2006 proving that fundamental investing works in helping you pick the best" D, m/ s/ W/ Z2 o& o
markets and avoid the flat ones. This .5% decrease should have little impact
# [% d4 s5 O- aon 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
8 E' l- [3 M, B7 f9 S# ~market continues to be super heated. With close to 3,000 net new people into
/ t' j5 N( u$ A6 Q3 cthe city every month, the property market just can't keep up. That is why we
c; o8 O: H- G, k5 ?saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
6 F) j/ M7 E J( c0 V- y: QThis is great news for the future of re-sale values in the city as these$ u0 o1 `; ?7 m9 h! X
increases will continue to ripple out into the market for at least the next six
, |+ n0 `7 C1 X9 V& ?months.
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' E Y6 q- W& x3 }4 @Comparing these two regions is a great illustration of the value of not getting
$ T( ^# d& l! O& H, b0 Z: W: m+ |: ycaught in the 'emotional guessing game' by just focusing on the underlying
2 F7 Y; d) r+ ifundamentals. It is sad to see those people who said in the last 2 years that. `0 ]( A$ v1 F% }( D2 G; W% }
the Alberta real estate market was over and they were going to sit back and wait
4 }8 |5 Q5 R" a8 `until it drops. Quite obviously, they have missed out on AMAZING gains, all0 q2 Z" }, z6 v9 _" O
because they didn't follow fundamentals, they just led with their emotions.: P6 u# ~" r; a+ J+ Q& d5 s b
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
2 W" M1 o3 o# a$ h5 P' N5 u. v2005 to June 2006), also great news.' Z( a8 i2 f2 Q8 D
1 u( Q; D# y/ T9 S$ S0 GBy comparison across the country, these are the numbers for June 2005 - June2 e. {' M- y8 y- U( A
2006 New Housing Price Index for:
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* F1 c3 h: E, {& H( pVancouver . . . . . . . . +5.2%
8 A6 N. o6 U1 G: d* GSaskatoon . . . . . . . . +8.5%
/ Q: A% l5 ~8 D. J# dLondon . . . . . . . . . . . +3.0%
, g- n& ]* K6 _% sHamilton . . . . . . . . . . +4.9%
% ^1 `5 \5 ]# [8 D" K, `% a- PSt. Catharines - Niagara . . . . +4.9%
' F. f0 [' {+ j* FToronto and Oshawa . . . . . . . +3.2
' E, U4 k: H& }Ottawa - Gatineau . . . . . . . . . +3.1%
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Fundamental investing ALWAYS makes you look like a genius - emotional investing2 \! t. q, I: A9 E
gives you quick highs, but also quick lows. Well done on your focus!
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5 h2 r7 m# o- [* L8 Z) CAs the fundamentals have been showing all along, the Alberta market continues to
7 N6 A3 k0 s- e4 `be strong, as in-migration and job creation continues to attract people from not' v) W, T5 b% q0 f* k% ~
only across Canada, but from around the world. Our average wages are8 \' Y `/ c& X; }
increasing, our population is increasing, our unemployment rate continues to2 e: C9 |8 _+ F0 T2 f7 _9 o
drop and our GDP growth is slated to once again lead the country.
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/ r/ }+ M- G) m& R% LHere are some very interesting facts that are helping to support the strong
3 S: s# o& e8 H. q/ G* wfundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in \ _$ D. s* k7 B+ O& B
Canada, with Alberta once again leading the way. In fact, the projected growth
9 o9 ^# p7 S8 V9 b9 s& p7 ifor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and: k+ C. _+ \& e; X; `/ N
this is slated to occur even with the labour shortages we are witnessing.
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) _$ ]% o, q" J9 Z" Z2. People are discovering Canada as an investment center from all over the
9 o$ M: r2 H* h+ Eworld. Recently, there have been investors coming here from Asia, Australia,4 H+ a- _% N- e+ ]. e) E K
the US, UK and Europe. In fact, if you review the world's press you will see
2 y4 p) {0 _: N' \3 n. Tthat Canada (with a focus on Alberta) is being discussed more frequently. 4 Y. Y* s' g$ H( b6 l) H) q5 I
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3. Don Campbell has just returned from presenting our Canadian investment
: l% L6 Q$ ]; u! J$ [* _- Vatmosphere (including Why Alberta - Why Now") to a group of major investors in
1 B0 x$ K$ x s6 a* I1 C& PDublin, Ireland, and the response was overwhelmingly positive. In fact, after% Z' _, I) b6 p% f
Don presented the economic facts, many of these investors (who could invest' c# J3 m( M/ ~" F
anywhere in the world) have already booked their flights to here. Once again& x! B1 \1 b8 ?# i6 q; |3 M) `- q8 ]
proving that when the true numbers of our economy are presented (along with the, f& I5 x' ^7 `5 A; \4 K4 [
political stability of our country), there is no place in the world that can M+ r! _0 L4 L9 k( B! a
beat it for long term investment., A( G+ d2 Y6 h
5 T9 A4 }1 ?& B* R( O4. Job creation continues to be strong (with a small lull in June); definitely, [! w3 h! e% y: w7 M
a sign of strong long-term fundamentals. RBC has also been following the job
0 t; q, p( t! q! G9 \5 W4 Hcreation situation and here is what they are saying: (www.rbc.com/economics)) l3 K" C! {: X. V
"After generating a substantial 96,700 jobs in May, the largest such gain since% t/ c _ m4 U7 }( @
January 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
) i+ N* g3 Q8 q) m0 w' p0 _0 `4 Hfirst half of 2006, a feat not matched since the second half of 2002. With the; z# u5 `0 V s0 T" o3 g0 w$ {
economy widely expected to grow at a more moderate pace in the second half of- m. k1 U; F* R; Y- j$ \9 S
the year on the back of slowing trade activity, this impressive showing may not
3 q0 I% H- F( @# Z; L! frepeat itself. We expect that employment grew in July at a pace consistent with3 d' [; H E; ^, Q& P
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at5 P2 ?9 x2 H8 x+ S0 W2 D: k( Y
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
* t2 B( U; `% p" @. Q4 G- \of 6.1%." Overall very good news. Now the key is to ensure that the region in
& Z& B7 i# l- N- f) P! Lwhich you are investing is continuing to generate jobs and increasing incomes.' O" `4 _6 v7 g) t
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In other words, it is a great time to be taking advantage of this strong
* V+ O b5 }6 b' v0 ~3 h7 A' Deconomy, avoiding 'excuses' and to especially not listen to the uninformed+ y. h) L- [) ?' }% q3 ]) _
'dream stealers.' As long as you stick with your game plan, you continue to do
8 B- M) L+ p- W% U5 \your due diligence, and you remove emotions from the equation, you will see the3 C% R+ @" B* }" _5 U3 V5 {5 P0 `. W
opportunities that are right in front of you, right here in Alberta. Let the
# g; w2 }1 w" S3 V5 \5 n- n7 F; l'dream stealers' call you 'lucky' 5 years from now as your net worth has soared8 j* V% W! A% n* c" }& T, p
and your financial freedom has surpassed even your wildest expectations.+ k* ~3 z% L6 Q$ E3 a
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( U; H: y4 M# q) p! \Capital Gains Comparison.* ^5 t- Y4 V, U! [9 Z, c7 j! O9 _
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KPMG has recently released a comparison of the true Top Federal and Provincial
5 d- c( a$ F$ @5 u) n3 I/ X+ sMarginal Capital Gains Tax Rates per province. It is very interesting to see" C" d8 r3 }0 |6 p# N" A
how these will affect your exit strategy. Here are the numbers:* ^3 A) `: Q$ L2 {3 p) ^/ A
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BC . . . . . . . . 21.9%
1 `& `$ d- ^ N( E7 U( c2 ^AB . . . . . . . . 19.5%
6 u# T. ~2 ^! D: [, BSK . . . . . . . . 22.0%5 T( j0 b4 V3 k2 w% E! t# @$ s
MB . . . . . . . . 23.2%) h5 U2 }0 H) T' V$ b
ON . . . . . . . . 23.2%
' |) E$ D8 G }$ x2 T0 bQC . . . . . . . . 24.1%* p t9 z: |/ `7 L7 U
NB . . . . . . . . 23.4%( T5 V! W* u$ y8 r
NS . . . . . . . . 24.1%
7 A" H x7 n2 c. g) u$ y W% ^PE . . . . . . . . 23.7%
( {* T& `. [ J. V2 @* n2 V! ZNF . . . . . . . . 24.3%4 K* F# L6 M' e/ o5 y) {8 l! O C
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Lower capital gains tax increases investment and stimulates the long term+ `8 I$ Z0 M8 s3 i
economy of the province. It also allows real estate investors to keep more of5 a7 l$ n9 F, s9 h6 l3 u
their profits at exit time. Always a good number to pay attention to.' G# G' b! g3 T6 r: \% Q4 H/ [
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Overall, by staying focused for the next short period of time, you have the* ?# j# _0 ^% u3 h
opportunity to create financial freedom of which others can only dream. Of0 }, |2 Y2 C1 t1 s3 P4 d% t5 N+ k9 ?# x
course, the key word is focus. And with an August line-up of 'Members Only'" F \% i; k$ K9 S( _$ _
events like this, you can't help to become a real estate investment champion# G. a3 Z# E# L
when 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' e9 g* o0 Y1 Wresults in just a few short years. |
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发表于 2006-8-25 08:35
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