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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- z+ D' Y- C$ N% [1 w: F
interesting insights, not only into where the market has moved, but where it
3 x+ v# L" T9 _- Y. ?will be going.4 \* a0 J' t' I& J, a
9 y4 x2 Q9 W1 {) k+ [% c* J7 bIt proved, once again, the value of looking at fundamentals behind a market.
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7 U D3 y2 m& a9 D9 RThe New Housing Price Index is compiled by Statistics Canada and is used by
+ y: `+ b$ x4 fsophisticated investors to see how much the market has moved, as well as an
! a1 z* \, [% A) jindicator of where re-sale home prices will be moving in the coming six months. ) i( e7 u2 e. z7 E3 b; M
We look at the ripple effect that new housing prices have on re-sale property* w& H( b+ p+ r
values and can extrapolate what direction re-sale prices will be moving and by& ?# d' ^/ F2 t2 J3 V( m4 R: t" L
how much.
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3 y) w s7 H5 M3 d! z MFor instance, for the last three years, we have told investors to avoid Windsor,% {: U1 q7 l4 K% K- X
Ontario as an investment area because the underlying fundamentals are not very
- B( C3 M. u& I8 J& E+ q8 w' Sstrong. This has been proven once again with the release of the latest
* `+ D. I$ w! _; H Ufindings. New Housing Prices have actually decreased by .5% during June 2005 -: j. \1 \+ q) c+ M \' P* G( }' \
June 2006 proving that fundamental investing works in helping you pick the best
- k' J: [! S; @% H5 r# e. g/ lmarkets and avoid the flat ones. This .5% decrease should have little impact
. H+ |: ~1 K7 a6 hon average re-sale values in the Windsor region." V$ b) u6 N- \: ^! ~
' K, a- d; K# I; H/ `! \To contrast this, the fundamentals we discuss are so strong in Calgary that the
2 ]( ~6 g* y! T$ @, Wmarket continues to be super heated. With close to 3,000 net new people into
& G0 e" R3 O. F- @; Wthe city every month, the property market just can't keep up. That is why we" ?) l# ^+ w% k3 i4 x+ A4 e0 j& c
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). - A$ ~0 n4 T# S) {3 x+ ~8 Q7 T
This is great news for the future of re-sale values in the city as these
) V) [; W8 t! E" S. xincreases will continue to ripple out into the market for at least the next six
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Comparing these two regions is a great illustration of the value of not getting7 l; a6 E+ H2 ~
caught in the 'emotional guessing game' by just focusing on the underlying) H A! s+ b- n9 ]& y
fundamentals. It is sad to see those people who said in the last 2 years that
. x, V8 J5 _4 J* e# ?; q) \the Alberta real estate market was over and they were going to sit back and wait
, T- T4 p. U. v3 ] Muntil it drops. Quite obviously, they have missed out on AMAZING gains, all2 r/ z) Q7 G+ }7 h
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
/ @1 b9 |/ p5 U/ F5 A2 Y& P, A2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June9 K( F( {4 T! G6 ^. @
2006 New Housing Price Index for:
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Vancouver . . . . . . . . +5.2%
6 Q; F9 P& S9 C/ _Saskatoon . . . . . . . . +8.5%4 W; h2 Y" i" _) W. ~+ j" V: K) }
London . . . . . . . . . . . +3.0%' n- G8 q, A, B/ o# B
Hamilton . . . . . . . . . . +4.9%
7 n3 x4 T* \7 N0 Q/ MSt. Catharines - Niagara . . . . +4.9%' B0 b( q( Y8 D4 e- \
Toronto and Oshawa . . . . . . . +3.2- F0 f4 T) g3 D" {
Ottawa - Gatineau . . . . . . . . . +3.1%' I4 y2 P2 g% @. |
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Fundamental investing ALWAYS makes you look like a genius - emotional investing
# [4 A8 _- I2 I% x8 {. C( G' I$ bgives you quick highs, but also quick lows. Well done on your focus!2 D. d; F$ f9 o2 S
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As the fundamentals have been showing all along, the Alberta market continues to
- g" p' k6 v" o* U4 lbe strong, as in-migration and job creation continues to attract people from not
5 h, J( |& q/ C( j, D6 R1 aonly across Canada, but from around the world. Our average wages are
8 J" t7 ~+ J* r& _" Tincreasing, our population is increasing, our unemployment rate continues to( w" n( l8 X) l8 M4 j* E3 z
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
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0 z) n5 n+ ]$ U; F1. The Conference Board of Canada is forecasting strong economic growth in
: Q& K1 r B* O* d' d; d5 m; ]Canada, with Alberta once again leading the way. In fact, the projected growth
* G7 f, W$ _1 u' S8 pfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and9 n+ \" W; z' O7 c5 U' f; H. M% g5 O
this is slated to occur even with the labour shortages we are witnessing.2 ~ N" d. p0 j
9 v0 Z: ]6 H& a" w* R2. People are discovering Canada as an investment center from all over the+ i' U W7 O+ P; S9 `, }* E$ k6 t
world. Recently, there have been investors coming here from Asia, Australia,4 o' D# `2 F/ p* y
the US, UK and Europe. In fact, if you review the world's press you will see7 g# O/ `! |7 L
that Canada (with a focus on Alberta) is being discussed more frequently. 5 N, O0 C- g9 j
v" h" o) B5 v$ t, ^3. Don Campbell has just returned from presenting our Canadian investment
: H: {. Y3 N* t6 ~" Y, \. C. a, \( i$ Eatmosphere (including Why Alberta - Why Now") to a group of major investors in
2 p( g( N4 c$ q4 D8 V+ q+ ZDublin, Ireland, and the response was overwhelmingly positive. In fact, after# P- @$ v5 x9 M; e' @; E7 {
Don presented the economic facts, many of these investors (who could invest. J' I7 |! g, W+ ^0 U
anywhere in the world) have already booked their flights to here. Once again; Y/ o% Q& b# U3 V4 m2 j
proving that when the true numbers of our economy are presented (along with the
8 _: o1 f" P$ A1 d) opolitical stability of our country), there is no place in the world that can
6 \% I. V. h8 H6 Cbeat it for long term investment.( p8 n0 ?" ]. G& T# |4 M
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4. Job creation continues to be strong (with a small lull in June); definitely& t# Y8 M) V- c! |
a sign of strong long-term fundamentals. RBC has also been following the job
. d3 p g5 y9 D% K3 l$ O4 }+ ?3 j9 xcreation situation and here is what they are saying: (www.rbc.com/economics)8 E3 ~9 j+ A K; Y. N! D
"After generating a substantial 96,700 jobs in May, the largest such gain since
/ g( T# K2 V! | x/ \) QJanuary 2002, the economy lost a modest 4,600 jobs in June... 0 k/ P O6 U! G5 y
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the( Q4 q9 [" Y k2 J8 k
first half of 2006, a feat not matched since the second half of 2002. With the1 k6 `+ ]! ?. K, x. x
economy widely expected to grow at a more moderate pace in the second half of; X" R, n- r: @1 P$ X' p6 `
the year on the back of slowing trade activity, this impressive showing may not. Z3 L) I- b# f8 y( s. `$ @- [
repeat itself. We expect that employment grew in July at a pace consistent with
6 D% G% y. G V: ?its recent trend of 24,000 jobs a month. Assuming that the labour force grew at6 T' J0 |; ` D1 C, \
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate( E k6 B) \0 ~5 o; v: v
of 6.1%." Overall very good news. Now the key is to ensure that the region in! n! {$ }7 o6 y3 G9 k; _
which you are investing is continuing to generate jobs and increasing incomes.- t! U3 \5 u4 U/ E+ g. E
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In other words, it is a great time to be taking advantage of this strong
: G+ [6 w+ M/ _/ K5 neconomy, avoiding 'excuses' and to especially not listen to the uninformed
! [6 c* X' c& V; W1 Y'dream stealers.' As long as you stick with your game plan, you continue to do; O9 P* I7 `1 B$ [; [3 }; V- K
your due diligence, and you remove emotions from the equation, you will see the
+ l9 U% o' j5 f( k$ N2 H4 dopportunities that are right in front of you, right here in Alberta. Let the
9 V! S$ Q7 c' g- ?$ G5 X3 u'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
$ L6 o( y- C! p Q' V# f0 Zand your financial freedom has surpassed even your wildest expectations.9 O- D( N, W! `+ f( ~) T3 s9 u" b% d
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Capital Gains Comparison.
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8 F- u9 m4 U2 kKPMG has recently released a comparison of the true Top Federal and Provincial
, O0 w2 o: m# W, b( Q$ d& S1 ZMarginal Capital Gains Tax Rates per province. It is very interesting to see) ^4 _# J9 y2 g( J; h) U. a( D( {8 u8 b
how these will affect your exit strategy. Here are the numbers:2 z: ~ Y8 ?) Z% K R, b% E
; A7 V7 U; P4 ~, UBC . . . . . . . . 21.9%
' D* n5 ?; b& ^5 n) K D3 DAB . . . . . . . . 19.5%( I& x, r$ s' I/ \; h
SK . . . . . . . . 22.0%8 q1 d0 Q6 F* J% Z# y6 S# n
MB . . . . . . . . 23.2%
! _- Y) K6 A* x4 S6 ]! p& r# Z# _ON . . . . . . . . 23.2%3 B/ \# w' i# w) b" E( ^( F6 \
QC . . . . . . . . 24.1%4 R' x& a0 N" H7 J. p) T
NB . . . . . . . . 23.4%
, U' `4 [6 \5 V$ O2 K. @NS . . . . . . . . 24.1%
: u: W; L8 E5 H: G- P9 XPE . . . . . . . . 23.7%
( X& a" d! p+ u0 CNF . . . . . . . . 24.3%
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5 F, S( h( \9 k h+ m: i6 xLower capital gains tax increases investment and stimulates the long term% i% T- H$ Y& f
economy of the province. It also allows real estate investors to keep more of
; W. V5 B/ v6 E% q gtheir profits at exit time. Always a good number to pay attention to.
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0 w; E5 u2 l; B$ i- G( EOverall, by staying focused for the next short period of time, you have the
" h4 C- P, P9 U$ Gopportunity to create financial freedom of which others can only dream. Of C; B/ m4 P# n9 t3 Q& ]- A" x
course, the key word is focus. And with an August line-up of 'Members Only'
. d) c0 q- w4 v8 N. x) I K# Uevents like this, you can't help to become a real estate investment champion
8 I) w) l) G: Ywhen you take action as a full REIN Member.
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( \9 e* k/ h+ b5 mFocus on the fundamentals, keep emotions out of your decisions, and enjoy the
7 X# X' n; O j# X1 G1 P4 Hresults in just a few short years. |
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