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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
( X+ y+ @7 ~; Xinteresting insights, not only into where the market has moved, but where it
0 F$ \( Y3 |+ {3 S" }8 K) lwill be going.
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It proved, once again, the value of looking at fundamentals behind a market.
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' M2 p& q; [- B q' \The New Housing Price Index is compiled by Statistics Canada and is used by& g5 f m3 f' b# W- ?0 p2 g. c
sophisticated investors to see how much the market has moved, as well as an
Y7 r" \2 H2 U/ x* Vindicator of where re-sale home prices will be moving in the coming six months. 3 h$ j& ^3 b1 y0 I% t$ s
We look at the ripple effect that new housing prices have on re-sale property/ i$ [2 ?" b$ I
values and can extrapolate what direction re-sale prices will be moving and by
# Y1 c: d' |$ v9 v1 p' Fhow much.& s* r' s! {% z5 s" p! w
9 V3 t% p: ]) z9 p6 M3 j( g" cFor instance, for the last three years, we have told investors to avoid Windsor,5 R' Y- U, j6 z4 X7 y) Y
Ontario as an investment area because the underlying fundamentals are not very
; ?; K; f) Z* ?9 e# I4 q, }strong. This has been proven once again with the release of the latest
4 e; [& N1 K% E3 e: dfindings. New Housing Prices have actually decreased by .5% during June 2005 -; p0 t( v$ n: v+ i- ^) c7 C) `+ K
June 2006 proving that fundamental investing works in helping you pick the best4 {* F! \- C F" E
markets and avoid the flat ones. This .5% decrease should have little impact" v; W2 _7 K! N* Y7 [2 A% P
on average re-sale values in the Windsor region.8 P' k) U' c$ P Y2 F
: f6 }# l8 \6 v. S7 Y. O& U* STo contrast this, the fundamentals we discuss are so strong in Calgary that the
, { R. A9 r1 A, Q4 amarket continues to be super heated. With close to 3,000 net new people into- n# g% h( F: ^- ?, D' F. X f
the city every month, the property market just can't keep up. That is why we
3 c9 O- w; c/ J) L" e' P9 |" R- wsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). / G- h' e0 Z( c4 V( g) a
This is great news for the future of re-sale values in the city as these5 v5 P# C, d. ~2 ` |1 e* R
increases will continue to ripple out into the market for at least the next six
% b! S. b2 Q8 w0 @/ y5 bmonths. - u& v- a3 n8 U# A7 y8 j v
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Comparing these two regions is a great illustration of the value of not getting4 w) W* X$ b j; a
caught in the 'emotional guessing game' by just focusing on the underlying
2 u; s# \! T0 S# ^( Dfundamentals. It is sad to see those people who said in the last 2 years that7 R" R1 g: {% k" u/ N6 l
the Alberta real estate market was over and they were going to sit back and wait; J3 N7 J4 i6 q4 G1 ^9 c1 W) V6 U e
until it drops. Quite obviously, they have missed out on AMAZING gains, all
' g7 p+ v% f; g( S0 Kbecause they didn't follow fundamentals, they just led with their emotions.0 K7 O% m& n1 t! f0 Y P
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
, e- h" S2 S& o6 Y3 u( P* b: v! j2005 to June 2006), also great news.
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) P7 v; ]* @& m% y! t, HBy comparison across the country, these are the numbers for June 2005 - June& a" \) Z" h" ^8 g/ L
2006 New Housing Price Index for:' e+ W$ [; [. B f
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Vancouver . . . . . . . . +5.2%
2 i2 o* U& I" k! e* tSaskatoon . . . . . . . . +8.5%
: G: p; m, g. f0 VLondon . . . . . . . . . . . +3.0%
! K4 l' H5 d; l' m! c* t% DHamilton . . . . . . . . . . +4.9%7 Z& i7 A; E" M; {, x- g3 N
St. Catharines - Niagara . . . . +4.9%) J+ V" p2 u# V& o! o M
Toronto and Oshawa . . . . . . . +3.2
- w5 z {. i6 t" J1 I. l2 T5 GOttawa - Gatineau . . . . . . . . . +3.1%
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Fundamental investing ALWAYS makes you look like a genius - emotional investing& W9 f h3 G8 M) N
gives you quick highs, but also quick lows. Well done on your focus!
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As the fundamentals have been showing all along, the Alberta market continues to% o- \- t( e3 {: p8 X! B* v4 D$ o: C/ E
be strong, as in-migration and job creation continues to attract people from not
& D" O( Z& f; Uonly across Canada, but from around the world. Our average wages are! P. e: A, X) {2 h
increasing, our population is increasing, our unemployment rate continues to
/ e6 V& o5 M, d5 S ydrop and our GDP growth is slated to once again lead the country.
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) l2 G! p9 V! v( C6 aHere are some very interesting facts that are helping to support the strong
3 e0 J+ r6 P( C* Y0 ]1 K, m, K: Ffundamentals:8 N3 L" `& O8 c3 b
+ U: S) i0 N9 x; p: K, K/ A1. The Conference Board of Canada is forecasting strong economic growth in
' }+ X0 r7 `5 eCanada, with Alberta once again leading the way. In fact, the projected growth
& K. c( \8 \/ [; Q$ m( B1 wfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and- M$ u, A. k7 x/ J7 e% D
this is slated to occur even with the labour shortages we are witnessing./ u6 F0 O7 z2 N) E5 U7 } P8 j
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2. People are discovering Canada as an investment center from all over the
9 }4 }' O/ Z0 |$ O+ @ z' uworld. Recently, there have been investors coming here from Asia, Australia,
5 a1 w0 X z( U9 r1 a7 kthe US, UK and Europe. In fact, if you review the world's press you will see
1 L$ T; p) s9 ~; D2 R6 Y) ethat Canada (with a focus on Alberta) is being discussed more frequently.
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0 @1 M p, q* R3. Don Campbell has just returned from presenting our Canadian investment
6 m, u. I P0 o, P0 p! i7 tatmosphere (including Why Alberta - Why Now") to a group of major investors in
# [9 L( u K* j) p7 A+ _Dublin, Ireland, and the response was overwhelmingly positive. In fact, after5 k, ^' f) y4 M- }* e$ e; q. S" `* T
Don presented the economic facts, many of these investors (who could invest( }: b, O) ^5 B
anywhere in the world) have already booked their flights to here. Once again; {" q2 L% @8 Z$ z5 B( p
proving that when the true numbers of our economy are presented (along with the
1 U( B% q o$ ?' U1 ~" k3 _political stability of our country), there is no place in the world that can
5 t0 J9 g0 v- zbeat it for long term investment.
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( M4 }+ m( W |7 i4. Job creation continues to be strong (with a small lull in June); definitely
1 h8 q4 ]& l& u0 Ba sign of strong long-term fundamentals. RBC has also been following the job1 ~' s% q3 Z0 J- P1 M0 c; K
creation situation and here is what they are saying: (www.rbc.com/economics)
% x2 L6 v( f( ]2 h3 r' P/ k! ^"After generating a substantial 96,700 jobs in May, the largest such gain since9 ^2 k- {- a$ l4 g1 h
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
7 T$ I3 T, Q1 ]% \+ afirst half of 2006, a feat not matched since the second half of 2002. With the
7 N2 b* ? F- l" `7 E3 I9 `economy widely expected to grow at a more moderate pace in the second half of$ T; Q# i5 e$ @+ h7 o
the year on the back of slowing trade activity, this impressive showing may not) q( a: V9 L6 S2 h# f* N6 {4 V) ?
repeat itself. We expect that employment grew in July at a pace consistent with( [) V% ^7 |! w4 E l
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at9 v+ V/ ~* n# t" f$ Y& k7 Y
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate. n O7 ]6 v8 I8 M
of 6.1%." Overall very good news. Now the key is to ensure that the region in" R0 P, P. [/ U5 t
which you are investing is continuing to generate jobs and increasing incomes.
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( B% c9 c+ X5 p3 a2 d6 u3 u& LIn other words, it is a great time to be taking advantage of this strong6 e' h: A9 N0 }
economy, avoiding 'excuses' and to especially not listen to the uninformed( X. x- }! s6 R* s5 C; N, S) h
'dream stealers.' As long as you stick with your game plan, you continue to do
5 E p& ?0 ? q6 b- s1 J4 N lyour due diligence, and you remove emotions from the equation, you will see the
! |* Y7 `$ b5 t0 W* ]+ nopportunities that are right in front of you, right here in Alberta. Let the
# R" C* J( |, E/ c/ T2 K- l'dream stealers' call you 'lucky' 5 years from now as your net worth has soared6 D* p G4 b" h' u
and your financial freedom has surpassed even your wildest expectations./ n- y. z4 e6 ~0 X, q% F& L
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( b. B; y# W: j- [& _Capital Gains Comparison.
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KPMG has recently released a comparison of the true Top Federal and Provincial6 Z: Z7 _# ]$ I- W, S, s
Marginal Capital Gains Tax Rates per province. It is very interesting to see+ t6 s$ C# g8 ?5 b( I* O# L: o; k
how these will affect your exit strategy. Here are the numbers:3 m1 x( x) c, y
% T5 S6 \. t2 D) t6 m0 k3 P, LBC . . . . . . . . 21.9%
# o4 F0 X/ H) p n9 ZAB . . . . . . . . 19.5%; `. z% \3 r* q; n# ^3 v- O
SK . . . . . . . . 22.0%
; {; F- a& S# m0 Q+ x; T2 WMB . . . . . . . . 23.2%
l) c$ }1 j& L! kON . . . . . . . . 23.2% N9 K8 R/ D3 m+ w7 _* }
QC . . . . . . . . 24.1%
+ o7 u/ W7 ~4 c1 kNB . . . . . . . . 23.4% F: s: ~5 q: o4 s. h& o; ]7 O
NS . . . . . . . . 24.1%
3 m, w% Q6 w z( O/ k. HPE . . . . . . . . 23.7%
3 S2 i: f7 d9 Y8 I; G0 lNF . . . . . . . . 24.3%
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4 A; b. W" ^. f$ f8 m9 s5 ]Lower capital gains tax increases investment and stimulates the long term+ I3 W; l3 }, D! u* N
economy of the province. It also allows real estate investors to keep more of6 d H; Q2 b* J1 s4 J
their profits at exit time. Always a good number to pay attention to.
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$ {, \2 r- r/ o$ XOverall, by staying focused for the next short period of time, you have the
+ \ Z5 y5 x$ R5 ]* `opportunity to create financial freedom of which others can only dream. Of
: Q; ?0 h5 J, U+ ycourse, the key word is focus. And with an August line-up of 'Members Only'& F5 N# Z# J# A
events like this, you can't help to become a real estate investment champion
( B0 x) C- R) r5 `! N9 \* Z* Q# xwhen 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( N/ y4 D9 c; z9 _! t' ^7 y H5 Q. E
results in just a few short years. |
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发表于 2006-8-25 08:35
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