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NEW HOUSING PRICE INDEX...4 \4 A- b" u7 X$ v r+ [" K
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, c7 c* X; Z/ q9 |: mThe New Housing Price Index, has just been released and it provides some very( C: t4 t/ T) w& V( r
interesting insights, not only into where the market has moved, but where it
3 u) J" g( @. b/ lwill be going.
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It proved, once again, the value of looking at fundamentals behind a market./ ]4 e, `. D' \$ V9 ^
# X: N% F* A% d3 @% YThe New Housing Price Index is compiled by Statistics Canada and is used by
$ m3 r) |- T7 p+ Nsophisticated investors to see how much the market has moved, as well as an( H% p# X& Q' C3 }
indicator of where re-sale home prices will be moving in the coming six months. ) V. B" w* j8 d( F& m# y
We look at the ripple effect that new housing prices have on re-sale property; v/ o. g/ A+ Y* W, W- s
values and can extrapolate what direction re-sale prices will be moving and by
( @+ f& d, W' h% J/ w7 V2 m% Ohow much.
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For instance, for the last three years, we have told investors to avoid Windsor,
$ Z1 x3 l8 E: z' g, @4 hOntario as an investment area because the underlying fundamentals are not very
; ]' k7 ?( X! j- M Lstrong. This has been proven once again with the release of the latest
V2 b5 w0 |; e$ D5 U3 lfindings. New Housing Prices have actually decreased by .5% during June 2005 -
3 U; {8 m+ j+ z. x+ QJune 2006 proving that fundamental investing works in helping you pick the best: ~0 c; J" r+ i1 y& Y0 }4 E0 s3 s
markets and avoid the flat ones. This .5% decrease should have little impact& B8 k0 k4 F4 o Z
on average re-sale values in the Windsor region.
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3 Y w# \. Z- j' \: b+ O8 hTo contrast this, the fundamentals we discuss are so strong in Calgary that the+ B* J6 f# m/ _! h2 m
market continues to be super heated. With close to 3,000 net new people into
/ [4 c' O& {- b* I( D g& |the city every month, the property market just can't keep up. That is why we
. q2 ? c- o" h! F o$ Dsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
1 X; ~8 c' g! v5 t" tThis is great news for the future of re-sale values in the city as these3 ?9 r5 a6 ?4 a# v8 Q6 R
increases will continue to ripple out into the market for at least the next six
" Q* q3 E2 ^/ X$ [8 Nmonths.
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) z( Q m5 b- B0 o& ZComparing these two regions is a great illustration of the value of not getting
" o1 W- j9 @; @caught in the 'emotional guessing game' by just focusing on the underlying F3 F7 r4 l# C. F9 |7 U! r9 @
fundamentals. It is sad to see those people who said in the last 2 years that
) O) F( l% R% P g k2 h Fthe Alberta real estate market was over and they were going to sit back and wait
; E: F: v1 e. T* s+ quntil it drops. Quite obviously, they have missed out on AMAZING gains, all* e) W+ T; b g: \$ |0 |
because they didn't follow fundamentals, they just led with their emotions.1 q4 ~$ y0 _* I' M
! k# ^ S K F- Q1 j: lBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June) s3 @/ y- v' h' ^" i
2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June
/ c O Y) \0 s5 j9 P2006 New Housing Price Index for:* F) y5 j0 K' A3 a% I
8 r4 ? O8 G: K- _/ D7 U" {0 uVancouver . . . . . . . . +5.2%+ @$ [! k5 O, C1 h# \
Saskatoon . . . . . . . . +8.5%" z; A3 o- O y( w
London . . . . . . . . . . . +3.0%
) A/ D: i. S: J1 A" c- U( M& R+ g& CHamilton . . . . . . . . . . +4.9%
5 n. N9 b4 c" \. qSt. Catharines - Niagara . . . . +4.9%
; v& H4 U0 q$ f" aToronto and Oshawa . . . . . . . +3.2
6 g4 {5 ~7 N) m$ Y7 ~) L/ OOttawa - Gatineau . . . . . . . . . +3.1%
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Fundamental investing ALWAYS makes you look like a genius - emotional investing
2 F( e3 ~3 D. z' d1 [- |3 bgives you quick highs, but also quick lows. Well done on your focus!- M. G$ m, t6 G
O; @( m& O, n6 @2 ]As the fundamentals have been showing all along, the Alberta market continues to
: t8 S7 O8 C0 sbe strong, as in-migration and job creation continues to attract people from not
2 [2 H, i/ ]$ sonly across Canada, but from around the world. Our average wages are
& \$ C: ~' n; {% N$ I; Vincreasing, our population is increasing, our unemployment rate continues to
5 y S$ e0 O* e: _/ {' d5 idrop and our GDP growth is slated to once again lead the country.
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Here are some very interesting facts that are helping to support the strong
! _' k/ z4 ]. k& p6 Ofundamentals:0 U" C% M2 d6 k! K5 X
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1. The Conference Board of Canada is forecasting strong economic growth in
$ {2 K6 ^ @$ a& o0 s, d, bCanada, with Alberta once again leading the way. In fact, the projected growth0 U- n! \" B0 n5 ?- Z
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and" I# e- g; c9 F: g* x) G: s1 m* M
this is slated to occur even with the labour shortages we are witnessing.7 N0 u4 V: r6 D
P m/ e. L0 B9 x" c; V1 p2. People are discovering Canada as an investment center from all over the
S$ N: u. ?( ^. ^) @- \! a8 T' F' Vworld. Recently, there have been investors coming here from Asia, Australia,
- D. Q* ?( B* z0 n% G8 Jthe US, UK and Europe. In fact, if you review the world's press you will see
6 n# o1 F. n! F9 | E$ othat Canada (with a focus on Alberta) is being discussed more frequently. ' V9 w; Q: C" D. o- \+ U
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3. Don Campbell has just returned from presenting our Canadian investment
0 U# z' w) }8 I" eatmosphere (including Why Alberta - Why Now") to a group of major investors in
2 h: D) p. b- m$ w6 A) A p2 w4 ^- y, @Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
d, r8 E; m# d0 }+ ?Don presented the economic facts, many of these investors (who could invest
- @: j* r" y) F: D' E7 eanywhere in the world) have already booked their flights to here. Once again$ [ u' \; f, C- A; w, p( ^ D, K
proving that when the true numbers of our economy are presented (along with the
$ r* `, s8 t! o9 V# e9 hpolitical stability of our country), there is no place in the world that can
' D) B" y z, W y& B" mbeat it for long term investment.% }5 n' p8 z- n% A/ Y
% K ^: x1 D" n$ m- Z4. Job creation continues to be strong (with a small lull in June); definitely9 j8 \0 p6 u' s8 b4 i' k; d4 R5 w
a sign of strong long-term fundamentals. RBC has also been following the job! T0 l" B& m& ^! X
creation situation and here is what they are saying: (www.rbc.com/economics)$ K* X% |% B" b4 I
"After generating a substantial 96,700 jobs in May, the largest such gain since0 m0 J! @$ c2 t( I% |- k5 h2 q/ K
January 2002, the economy lost a modest 4,600 jobs in June...
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* S% e8 `! j5 _9 WStrength in the Canadian economy contributed to a gain of 215,600 jobs in the, N- Q% H `& ?2 {
first half of 2006, a feat not matched since the second half of 2002. With the( }4 N. x/ ^& j, r, N
economy widely expected to grow at a more moderate pace in the second half of
7 f, h( ]' B$ l B5 z/ tthe year on the back of slowing trade activity, this impressive showing may not$ X6 I+ W- |! P' c7 t( c, ]9 `
repeat itself. We expect that employment grew in July at a pace consistent with6 a: b. f3 Y2 |6 `, T, w
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at) N# S: M6 m6 A# \& A6 @+ K
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate' @. F" r5 f0 F
of 6.1%." Overall very good news. Now the key is to ensure that the region in
% O: W% a: R% R$ C4 g3 pwhich you are investing is continuing to generate jobs and increasing incomes.
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* D4 ~) h; X: w# u3 tIn other words, it is a great time to be taking advantage of this strong' {; F( \$ E+ l$ F
economy, avoiding 'excuses' and to especially not listen to the uninformed
) m8 x, q! R5 P+ K'dream stealers.' As long as you stick with your game plan, you continue to do
7 k5 d2 [2 r& W) w3 A1 g/ Q, kyour due diligence, and you remove emotions from the equation, you will see the
; l. @7 D5 K$ ~2 xopportunities that are right in front of you, right here in Alberta. Let the- i/ E! f* F7 A# r6 e: `
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared3 o+ E, B3 I/ M# q8 E, z9 v ?
and your financial freedom has surpassed even your wildest expectations.
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' c7 }5 l. B5 n5 Y; FCapital Gains Comparison.( }* N' p [; W" X# R$ Z
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KPMG has recently released a comparison of the true Top Federal and Provincial
" J0 |$ d- k+ b. X+ i/ HMarginal Capital Gains Tax Rates per province. It is very interesting to see
' p1 c+ |. P; Y$ {" v9 T& E' Whow these will affect your exit strategy. Here are the numbers:
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: y( |5 R; G8 z: OBC . . . . . . . . 21.9%" I' S' [/ c) }1 c5 k7 J3 h
AB . . . . . . . . 19.5%) y! H) E @7 D
SK . . . . . . . . 22.0%; m# l% E) l9 U$ O( M% M
MB . . . . . . . . 23.2%+ G3 o" D* p. K+ h4 i9 C0 I2 x2 l: y
ON . . . . . . . . 23.2%) {- F+ J: E4 m% N$ u7 ^
QC . . . . . . . . 24.1%: B4 m- |/ {% P
NB . . . . . . . . 23.4%
* x6 p7 P' S* {1 \NS . . . . . . . . 24.1%
F4 x/ q! j1 i5 U. nPE . . . . . . . . 23.7%
3 D# n2 E% y( r7 r% @1 Y7 INF . . . . . . . . 24.3%: ]5 e3 F) C' h$ {5 ?
: G, W& p" o! o8 TLower capital gains tax increases investment and stimulates the long term, q$ c9 v4 k$ a5 ? v
economy of the province. It also allows real estate investors to keep more of
# k' Q/ z- Z! C6 j. qtheir 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 the1 m; \- F* y0 O# Z/ Y) t
opportunity to create financial freedom of which others can only dream. Of
- r" m& j7 p, x* K7 zcourse, the key word is focus. And with an August line-up of 'Members Only'! J; e- s& [. h& p3 E7 q4 I
events like this, you can't help to become a real estate investment champion# O; d" {6 a1 S X$ K" W. \
when you take action as a full REIN Member.
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: C) H0 V) y9 ?- bFocus on the fundamentals, keep emotions out of your decisions, and enjoy the
2 ~# \1 T3 w9 ]+ Qresults in just a few short years. |
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发表于 2006-8-25 08:35
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