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NEW HOUSING PRICE INDEX...
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/ l/ ?( Y2 a' p( Q3 Q/ e, WThe New Housing Price Index, has just been released and it provides some very/ p- ~. ?7 F. L1 Y/ F
interesting insights, not only into where the market has moved, but where it) G8 J/ X- Y; K# ~9 Q8 ^/ m
will be going.2 B. i1 C' Y$ v( H
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It proved, once again, the value of looking at fundamentals behind a market.# U1 e8 h8 x* u& y; |9 f
) y( E5 c9 m$ T* ]The New Housing Price Index is compiled by Statistics Canada and is used by$ V+ L$ \. L A+ {$ h1 g
sophisticated investors to see how much the market has moved, as well as an4 j1 Z6 i& h* M; b& S4 M+ V+ G
indicator of where re-sale home prices will be moving in the coming six months. - [6 q5 H0 }4 ?, Y/ D
We look at the ripple effect that new housing prices have on re-sale property2 p$ @7 u$ J9 T
values and can extrapolate what direction re-sale prices will be moving and by3 o7 E3 t, c2 V# f- A- }! r
how much.
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For instance, for the last three years, we have told investors to avoid Windsor,
1 E: _9 ]9 n9 [, IOntario as an investment area because the underlying fundamentals are not very
* o% q, v6 X8 r! R+ T0 O) X& bstrong. This has been proven once again with the release of the latest! k% W4 s6 Z4 h* v/ O
findings. New Housing Prices have actually decreased by .5% during June 2005 -
1 G1 [# `2 f% p( W2 S! C0 O6 DJune 2006 proving that fundamental investing works in helping you pick the best
" Y+ A* k1 ~$ C3 Kmarkets and avoid the flat ones. This .5% decrease should have little impact
( D' k% ?& F: M0 n0 A* a9 [on average re-sale values in the Windsor region.5 k( R) B8 g% L7 C5 a
! E& T: R! u+ k! R- g$ }To contrast this, the fundamentals we discuss are so strong in Calgary that the9 ~- @* X$ D U, v& ~9 h2 d: N
market continues to be super heated. With close to 3,000 net new people into0 J% o/ Z$ z: g
the city every month, the property market just can't keep up. That is why we& Z7 a' N' D, }" z' f6 d
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
/ m$ s. Q/ Z* IThis is great news for the future of re-sale values in the city as these- o, t: f* z: n" N: Y6 L
increases will continue to ripple out into the market for at least the next six
" N3 E; y: d, s F: N# zmonths.
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Comparing these two regions is a great illustration of the value of not getting
5 U$ V- M2 Z* g! k0 c. G' h$ Vcaught in the 'emotional guessing game' by just focusing on the underlying3 E8 P) z. ]) l3 Q4 R2 x
fundamentals. It is sad to see those people who said in the last 2 years that
7 Y5 \5 r$ ?" q$ q% tthe Alberta real estate market was over and they were going to sit back and wait- Q( J' l2 H: H
until it drops. Quite obviously, they have missed out on AMAZING gains, all
0 r. j& }+ h9 r% o4 m/ n' }2 |because they didn't follow fundamentals, they just led with their emotions.
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
9 X& }% N$ T9 j! Y9 n, T2 F2005 to June 2006), also great news.
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' d7 f# k5 V" n: g3 a) M5 o$ VBy comparison across the country, these are the numbers for June 2005 - June* w/ ^) ^$ `+ x8 s6 C0 s1 l/ O N) R
2006 New Housing Price Index for:1 j6 P, F' \3 U; _; O1 P
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Vancouver . . . . . . . . +5.2%8 |5 R2 w' i% F2 ]) Z. F( q
Saskatoon . . . . . . . . +8.5%1 s: ?0 a0 C0 \) m: C0 ~4 d
London . . . . . . . . . . . +3.0%
' S( {+ f! J7 ]6 ~7 m$ `Hamilton . . . . . . . . . . +4.9%
& P- r! c0 w4 g) `" Q' a- _* hSt. Catharines - Niagara . . . . +4.9%
) E' K3 D: U1 N Q" V; d5 |Toronto and Oshawa . . . . . . . +3.2
# r3 z; I. [. O3 xOttawa - Gatineau . . . . . . . . . +3.1%) I! w3 a8 H& Q: T' j6 m
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Fundamental investing ALWAYS makes you look like a genius - emotional investing! ]. `( L) N: y/ \3 P1 z2 ^2 D5 U
gives you quick highs, but also quick lows. Well done on your focus!% M* J. @ H! @# G6 O" d1 p
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As the fundamentals have been showing all along, the Alberta market continues to
: c/ [4 m$ A- N! l& Wbe strong, as in-migration and job creation continues to attract people from not
. M/ c3 \# ?( v5 q5 ]- konly across Canada, but from around the world. Our average wages are
} s6 o' Q' p8 [increasing, our population is increasing, our unemployment rate continues to
+ A7 t" R4 d5 A& v& ^drop 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
: D( J8 t" k# Rfundamentals:3 K, F2 g' T4 E0 j/ ~4 ?
4 O! g a9 ?4 t" W0 K) Q1 Y1. The Conference Board of Canada is forecasting strong economic growth in) ]9 c3 ]9 }( s( L/ P" Y" ?. ?2 y2 L
Canada, with Alberta once again leading the way. In fact, the projected growth
1 D2 p2 `$ F% d% bfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and5 a/ @! v( ^" l
this is slated to occur even with the labour shortages we are witnessing.
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2. People are discovering Canada as an investment center from all over the
0 |( F& }6 M) U2 S2 ~6 a wworld. Recently, there have been investors coming here from Asia, Australia,8 q9 ~- |* m! n, Q* M
the US, UK and Europe. In fact, if you review the world's press you will see
' G) m- V/ H, Rthat Canada (with a focus on Alberta) is being discussed more frequently. , q1 B0 t. R- ?8 _# \: d; ^
+ l; r0 G8 \# A7 T3 v" ^- h3. Don Campbell has just returned from presenting our Canadian investment
( l- d- W( G8 Q5 F. f( G* Yatmosphere (including Why Alberta - Why Now") to a group of major investors in
" T7 B4 g1 Z$ s6 k7 k% BDublin, Ireland, and the response was overwhelmingly positive. In fact, after
# u( e3 l. z6 g2 Y* l* qDon presented the economic facts, many of these investors (who could invest$ \. C+ c7 Y5 s% [3 D
anywhere in the world) have already booked their flights to here. Once again
5 W1 u. ^4 K8 v) o; Aproving that when the true numbers of our economy are presented (along with the8 L. |- q% C; S" ]
political stability of our country), there is no place in the world that can- ~! N y! t# y; V! w
beat it for long term investment./ \/ g$ g# K5 b, G8 Y2 r
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4. Job creation continues to be strong (with a small lull in June); definitely
5 I$ p% K) D2 \a sign of strong long-term fundamentals. RBC has also been following the job
- R. w6 P- a+ x1 M# b' n" hcreation situation and here is what they are saying: (www.rbc.com/economics) x" P3 @( l, e3 W* }. O
"After generating a substantial 96,700 jobs in May, the largest such gain since; J: g- a. N2 M9 \, b4 Y
January 2002, the economy lost a modest 4,600 jobs in June... - \7 E8 I5 o6 q* ` ]) J4 Y
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the* @1 Z+ V. ^$ U' Y8 q6 l
first half of 2006, a feat not matched since the second half of 2002. With the
/ \. r2 x0 `3 f6 z3 M9 deconomy widely expected to grow at a more moderate pace in the second half of
, r) K* O) q$ U% y- u; mthe year on the back of slowing trade activity, this impressive showing may not$ y" _2 D$ C4 C+ ~" c
repeat itself. We expect that employment grew in July at a pace consistent with) O3 P- G" u4 `+ i8 a
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
# V' C: H: K* {3 Jits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate& ^ k6 w* R {. c3 A+ s) n J4 C
of 6.1%." Overall very good news. Now the key is to ensure that the region in; ~+ y; h# q& \+ w( a
which you are investing is continuing to generate jobs and increasing incomes.' E" q0 Y) L, \ N7 A" b/ x4 L6 \' o
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% i4 N% H+ E; G% |' P- r) p, lIn other words, it is a great time to be taking advantage of this strong
4 V6 C2 m5 z+ }$ P' i' F: |economy, avoiding 'excuses' and to especially not listen to the uninformed
9 t8 z9 S( Z2 B" e'dream stealers.' As long as you stick with your game plan, you continue to do$ ?0 C, y: U- s( p
your due diligence, and you remove emotions from the equation, you will see the8 J& z. _) c9 R A5 t( Q7 t8 d
opportunities that are right in front of you, right here in Alberta. Let the) Z; ?% h- K9 J0 ]
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
& K: i7 R4 }0 t( hand your financial freedom has surpassed even your wildest expectations.
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: b8 H% o) E% R2 L6 M7 [0 fCapital Gains Comparison.
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9 T4 L- r" H/ @4 J' D) C: o! aKPMG has recently released a comparison of the true Top Federal and Provincial; g, E- v: Q/ c4 B' b3 N, H5 m
Marginal Capital Gains Tax Rates per province. It is very interesting to see
( |& L% {# k2 Q$ phow these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%
1 A6 N& d J9 l) u4 m- V+ b% O. Z: NAB . . . . . . . . 19.5%
" W; l6 J3 y( jSK . . . . . . . . 22.0%
' o$ O& _0 d6 `1 G3 _MB . . . . . . . . 23.2% p# I9 g, g0 o! U' F
ON . . . . . . . . 23.2%% J% V+ M! `: l& z# ]; M: z
QC . . . . . . . . 24.1%" i8 w' Q7 }2 r6 V$ v: \, _
NB . . . . . . . . 23.4%: u- Z* |- j1 |5 k0 {. C, B$ g
NS . . . . . . . . 24.1%
1 _3 ~) ^/ l( ~- ?& q- {$ G2 ePE . . . . . . . . 23.7%9 F' k& r- M/ {' h# O' s2 ^
NF . . . . . . . . 24.3%
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Lower capital gains tax increases investment and stimulates the long term
9 m7 _8 a( M9 ]/ Y' ], {4 Reconomy of the province. It also allows real estate investors to keep more of
6 W. }( \0 H& n0 Utheir profits at exit time. Always a good number to pay attention to.; ~5 m6 C j& R! C; C
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7 a: d- ?0 S9 J X; S0 f8 pOverall, by staying focused for the next short period of time, you have the
! r4 y+ C& s: t* q* H; [: \6 iopportunity to create financial freedom of which others can only dream. Of
" ?+ } U# _1 T, T# W% a, l) ^. Bcourse, the key word is focus. And with an August line-up of 'Members Only'
* C( l! u2 l; j' m# d, Y1 G) levents like this, you can't help to become a real estate investment champion
0 | S' |7 K9 B6 X; q! Swhen you take action as a full REIN Member.
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\% c8 t/ P/ o* }* ^Focus on the fundamentals, keep emotions out of your decisions, and enjoy the
9 E! P& `3 k0 _$ U# Uresults in just a few short years. |
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发表于 2006-8-25 08:35
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