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NEW HOUSING PRICE INDEX...
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3 p( j a9 n0 E5 p; D8 ]The New Housing Price Index, has just been released and it provides some very
& Z9 g: f0 M8 ?$ g: S, w# s1 sinteresting insights, not only into where the market has moved, but where it/ I; s- D8 j! w
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
% l/ o4 I5 K- ~ T8 p6 _! I! Usophisticated investors to see how much the market has moved, as well as an7 s. c7 |. x* T0 N
indicator of where re-sale home prices will be moving in the coming six months.
' N& _" T4 b# fWe look at the ripple effect that new housing prices have on re-sale property6 Q s+ H, Q: M- a6 D
values and can extrapolate what direction re-sale prices will be moving and by
; F ^/ T' M9 R5 x4 ]% |' [. Ahow much.
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* L* D" w$ s/ A4 m9 |For instance, for the last three years, we have told investors to avoid Windsor,
" x. V" r2 r9 w4 Z3 c8 A* GOntario as an investment area because the underlying fundamentals are not very0 ] p2 f; q+ }# j& r
strong. This has been proven once again with the release of the latest* `: |0 p+ _ } ^2 E. I8 e2 I
findings. New Housing Prices have actually decreased by .5% during June 2005 -, i: f3 W' i' J1 @8 y
June 2006 proving that fundamental investing works in helping you pick the best9 T$ r1 D, \5 ]
markets and avoid the flat ones. This .5% decrease should have little impact$ l: ` `( i, r. K$ ?' F' L
on average re-sale values in the Windsor region.
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8 k) V' ~1 F0 s" BTo contrast this, the fundamentals we discuss are so strong in Calgary that the) r3 y2 z. |. D
market continues to be super heated. With close to 3,000 net new people into! o' Y) B2 p: E1 h7 g! x7 v% x+ _
the city every month, the property market just can't keep up. That is why we
* U: p+ v, T" Y: gsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
5 Y5 M1 k) e+ tThis is great news for the future of re-sale values in the city as these3 P4 Q/ h- j* i# f& y" s& D3 Z
increases will continue to ripple out into the market for at least the next six7 K1 c( q/ C+ a1 x* U8 `3 z' X# G
months.
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# U4 }' y `! J. f6 tComparing these two regions is a great illustration of the value of not getting4 S7 G7 d# J$ W8 Y7 w9 |9 K5 s* r7 U
caught in the 'emotional guessing game' by just focusing on the underlying( d3 Z+ O% x9 ~: K4 L& B
fundamentals. It is sad to see those people who said in the last 2 years that
3 ?) |4 n- R* _0 t2 Ythe Alberta real estate market was over and they were going to sit back and wait
2 Z) g3 x3 c) W) W. z* R+ tuntil it drops. Quite obviously, they have missed out on AMAZING gains, all% ]) q$ M' ~5 u9 ?
because they didn't follow fundamentals, they just led with their emotions.
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/ W J' }" L9 p2 e% S! |, Z: `By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
C( w( ?& U9 x2 n* `0 D4 ]+ D2005 to June 2006), also great news.
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! C% q9 y# j0 v! s1 iBy comparison across the country, these are the numbers for June 2005 - June W u2 U/ G8 k/ M0 G" m0 L
2006 New Housing Price Index for:
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Vancouver . . . . . . . . +5.2%
2 S% k! p. [) RSaskatoon . . . . . . . . +8.5%0 N$ }+ k# \% D2 G) [6 m2 z, [
London . . . . . . . . . . . +3.0%' E$ N1 H0 i4 G* d* O
Hamilton . . . . . . . . . . +4.9%5 ]$ l# c9 h* O9 ^0 o: E3 O/ @1 @
St. Catharines - Niagara . . . . +4.9%
! j3 p8 K9 p' C% l9 z% W5 OToronto and Oshawa . . . . . . . +3.2
% c: y, s% Q) KOttawa - Gatineau . . . . . . . . . +3.1%
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Fundamental investing ALWAYS makes you look like a genius - emotional investing4 X& ^' m9 v# {& I
gives you quick highs, but also quick lows. Well done on your focus!# O' y6 t$ A% _
6 k. M2 _! R2 C* @As the fundamentals have been showing all along, the Alberta market continues to
$ f6 I' J! N$ J5 G6 o3 Bbe strong, as in-migration and job creation continues to attract people from not
! D4 z# S6 S+ f/ eonly across Canada, but from around the world. Our average wages are! S8 T' X; s4 L' W/ U# }
increasing, our population is increasing, our unemployment rate continues to* S8 ]4 h- n7 N9 s/ p- c
drop and our GDP growth is slated to once again lead the country.
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9 n7 ~+ f! Z" C% a- d' L% B: h1 UHere are some very interesting facts that are helping to support the strong2 }* p) N; F3 t" |) P( @8 |9 d6 V( M7 s
fundamentals:
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6 p q0 g/ F. F$ V1. The Conference Board of Canada is forecasting strong economic growth in
( _; d# x+ y) m' g1 `0 {. }( {4 mCanada, with Alberta once again leading the way. In fact, the projected growth
t3 p' b/ B" F2 f' Sfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
$ y! |: z W. E9 M: [! X$ ` Ithis is slated to occur even with the labour shortages we are witnessing.6 n1 { U/ ~6 Y4 n% N3 g
+ Y4 _" i+ P: W& h3 H2. People are discovering Canada as an investment center from all over the+ `! ~8 C2 g0 \9 t
world. Recently, there have been investors coming here from Asia, Australia,+ @ j8 H; H" M, y: `6 @& \
the US, UK and Europe. In fact, if you review the world's press you will see# X7 w* f) G; y" N' p- i: n5 k
that Canada (with a focus on Alberta) is being discussed more frequently.
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! d7 G! m! k& N" c3. Don Campbell has just returned from presenting our Canadian investment0 A2 |& j) ~% ?2 G6 M
atmosphere (including Why Alberta - Why Now") to a group of major investors in8 [; W7 f% F' H5 ]* A
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
% D/ A. e# m6 G6 D9 C+ DDon presented the economic facts, many of these investors (who could invest
) A' a9 L- B& l* Z% Fanywhere in the world) have already booked their flights to here. Once again* g( m# G8 r$ z
proving that when the true numbers of our economy are presented (along with the7 l8 g5 ~ Z0 }3 T* c+ x, i
political stability of our country), there is no place in the world that can
8 M1 E% ~7 s. p( B }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+ v/ V% s, _* \+ J6 M( }! j; [( wa sign of strong long-term fundamentals. RBC has also been following the job5 |+ m* {: A9 H; @, }5 _
creation situation and here is what they are saying: (www.rbc.com/economics)
$ A) D3 U' w/ t I$ P"After generating a substantial 96,700 jobs in May, the largest such gain since
# c J: x( @, V0 M; @( n" N0 e" j# EJanuary 2002, the economy lost a modest 4,600 jobs in June... & [2 Z' X+ e; E
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the
5 ]% Z- Z9 b$ Tfirst half of 2006, a feat not matched since the second half of 2002. With the
- J/ q; z/ B3 veconomy widely expected to grow at a more moderate pace in the second half of
# \9 P* H8 Z, sthe year on the back of slowing trade activity, this impressive showing may not
! \1 J* K' t, }5 X! k) s8 ^repeat itself. We expect that employment grew in July at a pace consistent with4 t3 g1 s7 o2 C& L9 [) t
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
) B4 i! v l# r- P+ b$ Y) yits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
; a( \, H- V5 sof 6.1%." Overall very good news. Now the key is to ensure that the region in
8 f2 ?# U3 z1 L+ {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( {* y! g5 K2 g' }8 L A
economy, avoiding 'excuses' and to especially not listen to the uninformed( o7 |0 C- F5 h0 {3 k
'dream stealers.' As long as you stick with your game plan, you continue to do
~) ~9 h# {" X1 a2 cyour due diligence, and you remove emotions from the equation, you will see the0 A1 [3 d' G# A" `+ u. |
opportunities that are right in front of you, right here in Alberta. Let the4 i8 n" T7 w8 T% [* \* N
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
9 x+ R d) `9 [( ]+ G, l1 zand your financial freedom has surpassed even your wildest expectations.( @9 k1 ?0 d2 ~9 V9 z2 r
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Capital Gains Comparison.
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KPMG has recently released a comparison of the true Top Federal and Provincial- l9 [4 \# Y; u0 ^1 b
Marginal Capital Gains Tax Rates per province. It is very interesting to see
- r) Y5 C: D$ I! m: C5 c. Ehow these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%7 B' q; u: `7 D! d, B
AB . . . . . . . . 19.5%/ C$ S l. W4 K: t
SK . . . . . . . . 22.0%
2 k4 j# M0 p9 N4 N FMB . . . . . . . . 23.2%: `' K2 j! B) a2 @7 l
ON . . . . . . . . 23.2%& S; M, Q0 q% Q/ M1 W
QC . . . . . . . . 24.1%
" V: L+ Y% _/ PNB . . . . . . . . 23.4%
* V, g' m' N3 Z" L) @$ Z3 h! YNS . . . . . . . . 24.1%$ B- T. \. `8 P6 m1 H
PE . . . . . . . . 23.7%
0 f& u. L1 `/ N1 }. X- _. F, |NF . . . . . . . . 24.3%( V7 r6 \! } j1 |4 {* L5 Z
& c2 B3 ?' G$ t1 F# @Lower capital gains tax increases investment and stimulates the long term, i- I1 s( F* ]& C/ r2 H/ o
economy of the province. It also allows real estate investors to keep more of
1 R1 Y3 q2 B8 [% U2 Ptheir 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
# `' Q0 P" }6 _, ^* n. a* bopportunity to create financial freedom of which others can only dream. Of# H4 g, J& D! P2 n; ~) K1 K: `
course, the key word is focus. And with an August line-up of 'Members Only'
+ D f \7 m$ u, O0 Cevents like this, you can't help to become a real estate investment champion4 o4 R: _# V- u* [4 ?7 b q8 T5 ?
when you take action as a full REIN Member.9 G6 j* `* y4 d' ~$ T
" t3 Y6 U# N z O, m, M; _Focus on the fundamentals, keep emotions out of your decisions, and enjoy the
. ^; e. m" _, }results in just a few short years. |
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发表于 2006-8-25 08:35
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