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NEW HOUSING PRICE INDEX...1 F6 b2 Z. g; _5 X5 P7 v
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The New Housing Price Index, has just been released and it provides some very* |3 x, y( f! ~$ W
interesting insights, not only into where the market has moved, but where it( J5 d: r& \- ?2 g2 i8 Q- z) A$ {
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 by2 ?; i3 @' ]0 N* i
sophisticated investors to see how much the market has moved, as well as an
* `+ Y5 G$ X7 M/ Aindicator of where re-sale home prices will be moving in the coming six months. % W3 m; a0 r# A9 M& x
We look at the ripple effect that new housing prices have on re-sale property' L% d4 l$ O8 U2 v( a8 _ o2 Y
values and can extrapolate what direction re-sale prices will be moving and by
: ?$ n% N: T* i) \) t% [" Khow much.
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7 H2 ?, d: x$ E$ Y+ aFor instance, for the last three years, we have told investors to avoid Windsor,4 I1 [) ~8 _5 H. G; b
Ontario as an investment area because the underlying fundamentals are not very
8 l7 A U" ~1 y; g- b, ~9 z$ Ostrong. This has been proven once again with the release of the latest
8 E, x9 ]8 i6 Ifindings. New Housing Prices have actually decreased by .5% during June 2005 -+ Y, T) v& f$ h3 [, |- a, M
June 2006 proving that fundamental investing works in helping you pick the best
' J9 a4 o. ?/ ], _. r4 P. lmarkets and avoid the flat ones. This .5% decrease should have little impact1 K2 h V! y1 z- O4 m& s! X3 n
on average re-sale values in the Windsor region.0 G# S7 U9 t4 e4 U
/ j; e. v$ x( R/ V. NTo contrast this, the fundamentals we discuss are so strong in Calgary that the2 z+ N, b3 C" x+ P
market continues to be super heated. With close to 3,000 net new people into7 O4 Z0 _' w+ ] S+ Z" L
the city every month, the property market just can't keep up. That is why we
0 f1 h/ f) T4 y+ M# Psaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). 4 o' g* I- p/ ]4 L+ u; L
This is great news for the future of re-sale values in the city as these- u7 Z X) q3 i9 L/ I. i
increases will continue to ripple out into the market for at least the next six
' H0 D' P" g+ m" n4 Q% ~7 Amonths.
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Comparing these two regions is a great illustration of the value of not getting
; b! k. b, o l( Rcaught in the 'emotional guessing game' by just focusing on the underlying
. w# ~. |4 I2 b. o& R* dfundamentals. It is sad to see those people who said in the last 2 years that
- M' T: } B, z2 H# ^8 c- Lthe Alberta real estate market was over and they were going to sit back and wait
* {) C: z9 B5 G5 `- Nuntil it drops. Quite obviously, they have missed out on AMAZING gains, all
6 x( N% v, x( } _because they didn't follow fundamentals, they just led with their emotions.) x p7 L" x' H( t
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
; p# K+ ~& h. y9 ]2 O% `: F# ^+ A7 R+ R2005 to June 2006), also great news.
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6 _+ N+ R: X. p$ RBy comparison across the country, these are the numbers for June 2005 - June7 q3 D* @8 ~5 `9 x5 X9 Y) w: g
2006 New Housing Price Index for:8 g" C! W+ i" I8 C4 G0 _
- D! x; @ O4 W9 U0 D8 v5 e: S5 _Vancouver . . . . . . . . +5.2%
8 t3 t- N! j2 k, p0 ~% ^Saskatoon . . . . . . . . +8.5%& v) N' Z; i9 d2 ~2 u2 {
London . . . . . . . . . . . +3.0%
8 ~9 ~3 |4 {) Z. d% q9 L3 SHamilton . . . . . . . . . . +4.9%$ r" G- ]/ K9 D9 I( K* z
St. Catharines - Niagara . . . . +4.9%
0 n3 s' B2 W6 r m9 q& T1 fToronto and Oshawa . . . . . . . +3.2, l9 Y V4 V6 F$ y8 i
Ottawa - Gatineau . . . . . . . . . +3.1%
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Fundamental investing ALWAYS makes you look like a genius - emotional investing& ]+ |& ~" Q C. f4 E
gives you quick highs, but also quick lows. Well done on your focus!3 D( O2 x. i- M- G2 g
1 f, y% g( {: V$ I' L3 x+ @6 lAs the fundamentals have been showing all along, the Alberta market continues to' x- i% G$ T' I9 x, V5 Q1 E
be strong, as in-migration and job creation continues to attract people from not
. p# |! m! i8 j( f ]& g, O7 ronly across Canada, but from around the world. Our average wages are/ o+ M/ g. u% l% `& k9 ]
increasing, our population is increasing, our unemployment rate continues to
/ E1 Z" p1 [8 F, e7 Mdrop and our GDP growth is slated to once again lead the country.6 j/ U: d( w1 h1 a: j$ {: z4 f& i
2 n) M# b2 b( B' m4 a2 z2 S0 MHere are some very interesting facts that are helping to support the strong0 a3 T; [3 f8 C. l/ ^
fundamentals:
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' D {( m# ]: R: Q; v& V$ }1 L1. The Conference Board of Canada is forecasting strong economic growth in2 b& T. d9 {* N. z1 o# P4 m& c# h
Canada, with Alberta once again leading the way. In fact, the projected growth5 D: k8 Q* q. y: a) Y
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and$ `2 t$ R! j/ m6 X7 N0 W
this is slated to occur even with the labour shortages we are witnessing.
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6 [5 H8 m( ^& D; n2. People are discovering Canada as an investment center from all over the. Z( g( J3 V( Q' @+ D
world. Recently, there have been investors coming here from Asia, Australia,
) n0 p. ^" x- w$ nthe US, UK and Europe. In fact, if you review the world's press you will see5 g+ ]8 p$ |0 m$ ?+ |
that Canada (with a focus on Alberta) is being discussed more frequently. 8 c& H ^ A: w, }
9 g- }. E8 }) P- s, `, {2 M3. Don Campbell has just returned from presenting our Canadian investment5 R) W7 k& g/ A$ Q' m% Z8 n8 M
atmosphere (including Why Alberta - Why Now") to a group of major investors in
& _$ b: z( M2 O8 T; S$ X9 o' K, z) _Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
7 V% J/ {2 {1 ^' |* n R$ `* ADon presented the economic facts, many of these investors (who could invest
% T! O! {$ Y. q0 Zanywhere in the world) have already booked their flights to here. Once again
4 l# p ]' `8 I0 h- D8 O9 lproving that when the true numbers of our economy are presented (along with the
+ \1 y" J7 a/ n: rpolitical stability of our country), there is no place in the world that can
; H4 C N0 W% tbeat it for long term investment.
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" n9 g, J; R* V! i( N4. Job creation continues to be strong (with a small lull in June); definitely
' I" q& x" v7 X2 \a sign of strong long-term fundamentals. RBC has also been following the job6 e: j- V/ a$ z+ p3 u
creation situation and here is what they are saying: (www.rbc.com/economics)* T, k) g! J+ W, a5 k# l
"After generating a substantial 96,700 jobs in May, the largest such gain since1 C5 U3 E* v; K& A! Q
January 2002, the economy lost a modest 4,600 jobs in June... 0 z; U( f0 s+ Q' @; X' s, I, ]' d
7 ?) _# S" o' N% rStrength in the Canadian economy contributed to a gain of 215,600 jobs in the! o7 O1 s$ v3 Q6 l
first half of 2006, a feat not matched since the second half of 2002. With the& v% e) ^( S7 @0 j( j
economy widely expected to grow at a more moderate pace in the second half of
8 O# D3 _ b; E$ D) c. M. Ithe year on the back of slowing trade activity, this impressive showing may not
4 l4 D+ x( \% `repeat itself. We expect that employment grew in July at a pace consistent with
9 h& t7 U6 ^: l6 Q0 ~its recent trend of 24,000 jobs a month. Assuming that the labour force grew at3 M/ v0 {, c1 f D6 V
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate3 f4 A( J! v8 f. k- y. J5 i
of 6.1%." Overall very good news. Now the key is to ensure that the region in5 t0 a6 s/ r: r" \' ]# D
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" k" e9 z; T% @) @economy, avoiding 'excuses' and to especially not listen to the uninformed$ `+ l: w: ~$ F; e+ b
'dream stealers.' As long as you stick with your game plan, you continue to do
& ^2 [& t- n8 v. Uyour due diligence, and you remove emotions from the equation, you will see the
* |3 m9 C( H# y i2 {: gopportunities that are right in front of you, right here in Alberta. Let the
5 f- U3 O2 p# o! ] b8 G'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
& O/ R1 `* E+ T; H; ^$ X! mand your financial freedom has surpassed even your wildest expectations.7 S/ l! g' ?0 Y4 L# Y- Q2 r
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Capital Gains Comparison.
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2 o; L- G8 L+ C1 S( |0 C: GKPMG has recently released a comparison of the true Top Federal and Provincial$ h& b9 t7 T7 v& H
Marginal Capital Gains Tax Rates per province. It is very interesting to see/ G/ }. M3 j$ Z" K
how these will affect your exit strategy. Here are the numbers:
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3 E/ x) @" T/ [, O: n: d9 @BC . . . . . . . . 21.9%
3 f. S9 u; U! a" g V$ m1 {4 J# [AB . . . . . . . . 19.5%2 t- X' d" H ?8 C# s/ z8 g
SK . . . . . . . . 22.0%
% F# l7 ]( b! zMB . . . . . . . . 23.2%8 G5 I1 O5 }, c, U) f, C
ON . . . . . . . . 23.2%
& q2 X0 y2 V( c1 m* S+ \QC . . . . . . . . 24.1%% T3 Q: d$ ]$ ]2 i9 l
NB . . . . . . . . 23.4%. W7 l- l$ W: d0 f
NS . . . . . . . . 24.1%8 Q# m, V( \3 m7 z3 p
PE . . . . . . . . 23.7%
& r; a+ O a hNF . . . . . . . . 24.3%4 H, c! d; I4 P6 B' |8 E: J
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Lower capital gains tax increases investment and stimulates the long term
! K) ^/ c$ n& \- u+ l4 Feconomy of the province. It also allows real estate investors to keep more of
5 y5 D+ L5 R0 Ktheir profits at exit time. Always a good number to pay attention to.
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1 K! A' u7 k; M% Y$ o8 n N6 DOverall, by staying focused for the next short period of time, you have the* P3 ]# N* A: D( d$ F9 l4 G N. N
opportunity to create financial freedom of which others can only dream. Of
, E# i4 S+ g' ~+ Ecourse, the key word is focus. And with an August line-up of 'Members Only'
& t! a) X. X* k& d! i2 o: @+ z1 `& ?events like this, you can't help to become a real estate investment champion- V5 n f6 B& n$ `6 M3 K. r2 [3 ]
when you take action as a full REIN Member.9 r- }+ G, Q3 g8 o9 d
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the
% R0 a; T5 U$ D$ G. m" M2 Zresults in just a few short years. |
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发表于 2006-8-25 08:35
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