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NEW HOUSING PRICE INDEX...
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) {; h0 V P& {: a4 ]& kThe New Housing Price Index, has just been released and it provides some very( _/ G' z; I" _$ Y5 x0 K+ `- n
interesting insights, not only into where the market has moved, but where it& [ o6 J- f" r
will be going.' Y/ e R, `3 d3 p5 a8 q& l
4 h7 c* W# A; E: U7 h) `. R* O# ]It proved, once again, the value of looking at fundamentals behind a market.1 q& M, a, O( ~1 L/ r1 | C
6 ~, Z# U9 F I% e3 x8 \% N! G+ uThe New Housing Price Index is compiled by Statistics Canada and is used by- q2 r+ l9 o2 x: x4 @
sophisticated investors to see how much the market has moved, as well as an; s' M4 T% ~9 T' I4 }, Y1 u; R1 N
indicator of where re-sale home prices will be moving in the coming six months.
v6 f0 O, }+ a3 g3 fWe look at the ripple effect that new housing prices have on re-sale property
0 h1 O1 G6 ]8 J8 c( Gvalues and can extrapolate what direction re-sale prices will be moving and by
. R$ ]4 ]$ I m" ehow much.) A1 y/ _$ `3 ^. Z& q8 q
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For instance, for the last three years, we have told investors to avoid Windsor,
5 U0 f# S, m, M% c1 sOntario as an investment area because the underlying fundamentals are not very
$ l t/ T; i( G9 Z4 `- Bstrong. This has been proven once again with the release of the latest
, f0 G) G5 a+ q" W3 qfindings. New Housing Prices have actually decreased by .5% during June 2005 -
: S; s- G+ ]4 p* ?June 2006 proving that fundamental investing works in helping you pick the best' u% S. d* G* j1 d$ F+ |% y; v
markets and avoid the flat ones. This .5% decrease should have little impact! F7 t5 F2 \. Q9 z" F4 U0 H. Z
on average re-sale values in the Windsor region.
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To contrast this, the fundamentals we discuss are so strong in Calgary that the, G1 k& i3 `: X6 I
market continues to be super heated. With close to 3,000 net new people into
0 Z& ]. [0 c( H/ U/ Gthe city every month, the property market just can't keep up. That is why we
: H7 [) @+ K' r) \4 N/ O8 ~2 usaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
: U% f" `$ `" t7 i9 m! SThis is great news for the future of re-sale values in the city as these& M5 G; a7 U1 ]7 n0 j5 [
increases will continue to ripple out into the market for at least the next six4 K* F0 x+ W' ^: r& R
months. 7 Y y+ K, I. k2 F
5 a- D) m$ W6 r# @7 LComparing these two regions is a great illustration of the value of not getting
" ~1 W, H9 }+ }: Qcaught in the 'emotional guessing game' by just focusing on the underlying6 h7 W! n) @" p; r
fundamentals. It is sad to see those people who said in the last 2 years that
- c9 j0 N$ I1 q. U; N4 @. K# E. Z ]9 ~the Alberta real estate market was over and they were going to sit back and wait
, b, |8 |- f; c, ]8 ~" P3 y6 R$ Tuntil it drops. Quite obviously, they have missed out on AMAZING gains, all: w4 O7 S6 r. }1 h/ p
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+ A9 T! U' S9 M) j8 B1 K
2005 to June 2006), also great news.
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( B" Q" M! ~0 P% R+ o' V- D/ sBy comparison across the country, these are the numbers for June 2005 - June
# D- _/ Y0 s2 a8 ]2006 New Housing Price Index for:
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* e# n8 H) C+ { n7 l. CVancouver . . . . . . . . +5.2%
1 T9 \) K4 I* _+ K% \* U5 J3 G/ zSaskatoon . . . . . . . . +8.5%1 z3 m9 f8 s% T! r- D1 M; e
London . . . . . . . . . . . +3.0%
6 u* G6 _: x8 l5 ~% t$ EHamilton . . . . . . . . . . +4.9%6 n3 I/ o9 x9 y4 T
St. Catharines - Niagara . . . . +4.9%
; B! U3 U7 s; e2 K FToronto and Oshawa . . . . . . . +3.2
6 y$ M7 ?4 O! d5 E; I$ XOttawa - Gatineau . . . . . . . . . +3.1%
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, ]8 x# O$ t$ `! l% }! N7 m+ D9 jFundamental investing ALWAYS makes you look like a genius - emotional investing
7 W: A% e9 E; h! l, c! Xgives you quick highs, but also quick lows. Well done on your focus!8 ^6 b+ W' a+ ^! D
( d, h# h' J; e1 l9 rAs the fundamentals have been showing all along, the Alberta market continues to% L5 z6 N- h% z8 Z5 ?
be strong, as in-migration and job creation continues to attract people from not! l% C) B2 c$ @ i8 S
only across Canada, but from around the world. Our average wages are0 V f( {+ u- E( U( O" r
increasing, our population is increasing, our unemployment rate continues to5 g( m+ H1 M& x; H. m4 h k7 U& o
drop and our GDP growth is slated to once again lead the country.; D6 w( E5 M+ W! D# C
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Here are some very interesting facts that are helping to support the strong+ g g! O/ B9 L) l1 l# y
fundamentals:' U% b; X4 r {- P: Q9 t
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1. The Conference Board of Canada is forecasting strong economic growth in
2 ]3 @$ W$ p0 r8 s) v. {Canada, with Alberta once again leading the way. In fact, the projected growth7 F' Q& U: n3 Z' W# c
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and: Y1 S3 J8 z' M
this is slated to occur even with the labour shortages we are witnessing./ h5 q, R" }2 O" X$ R% y
# x& r. i1 I& t" |) F* P, Q/ s2. People are discovering Canada as an investment center from all over the
6 z C6 Z) j$ e) d% x+ k. \world. Recently, there have been investors coming here from Asia, Australia,
! h7 B& B, ^8 O6 r3 }" x5 Jthe US, UK and Europe. In fact, if you review the world's press you will see
. ` n; l& [: f- rthat Canada (with a focus on Alberta) is being discussed more frequently. + n! F5 A5 y9 `/ A) \, F
- d; E; @7 T( `! `9 O) k& z/ e! X5 T8 |3. Don Campbell has just returned from presenting our Canadian investment& T' q. R2 ~* y1 F4 v* n5 E
atmosphere (including Why Alberta - Why Now") to a group of major investors in
7 T8 s; P! Z' R) |7 PDublin, Ireland, and the response was overwhelmingly positive. In fact, after4 Y0 `, L6 S9 P2 _
Don presented the economic facts, many of these investors (who could invest" F x9 A- ?/ X' T8 E- }5 Q) R* W3 i0 @
anywhere in the world) have already booked their flights to here. Once again3 t6 |4 C0 Q5 f/ F4 j8 P- n, a
proving that when the true numbers of our economy are presented (along with the
`4 X8 s" b g* d7 M2 Apolitical stability of our country), there is no place in the world that can
" d( z& C! U- c# }beat it for long term investment.) H( l4 S! h- \3 N7 T9 x
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4. Job creation continues to be strong (with a small lull in June); definitely
6 q/ k) m3 H( [" u9 p2 L8 h+ ~8 Sa sign of strong long-term fundamentals. RBC has also been following the job
8 K# u: r/ D3 [creation situation and here is what they are saying: (www.rbc.com/economics)
, ?5 i a! `2 S. ?7 Z+ `: j, M"After generating a substantial 96,700 jobs in May, the largest such gain since; k% r% Q6 f% O- m1 b7 B
January 2002, the economy lost a modest 4,600 jobs in June... 3 c! p% {& f, s1 r
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the) Q. Y9 [' R' R+ G, Q7 r3 x/ s+ j
first half of 2006, a feat not matched since the second half of 2002. With the
) c$ o/ h6 a: d& oeconomy widely expected to grow at a more moderate pace in the second half of
6 b. ]) R& C0 R8 t4 K2 W" Zthe year on the back of slowing trade activity, this impressive showing may not
" Q# H0 t) Z2 x/ D. G! _9 frepeat itself. We expect that employment grew in July at a pace consistent with
: B" o) P& X* u, f% yits recent trend of 24,000 jobs a month. Assuming that the labour force grew at
' R' U$ w" o6 ^! u" xits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
) |0 g& ]) I% W3 wof 6.1%." Overall very good news. Now the key is to ensure that the region in
* F( U$ y; ?, E+ q* B" e8 Bwhich you are investing is continuing to generate jobs and increasing incomes.. X. o3 i: q6 m2 [/ s9 p' x& l& i5 B
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9 K+ q: d+ o6 D8 PIn other words, it is a great time to be taking advantage of this strong# {8 j/ w: ~9 m0 {) ?- {2 B& x* T3 E
economy, avoiding 'excuses' and to especially not listen to the uninformed
( d: H( `/ V. x* `- c6 b n'dream stealers.' As long as you stick with your game plan, you continue to do
9 `: g+ z+ @+ ayour due diligence, and you remove emotions from the equation, you will see the. _5 a) f, h# a
opportunities that are right in front of you, right here in Alberta. Let the
9 R7 W( k; u# j) B5 l'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
- r& Y" g6 ^. ?+ q7 w8 land your financial freedom has surpassed even your wildest expectations.
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$ C2 u$ }% Y) u5 e( o* g* ACapital Gains Comparison.: S% ~- P$ G+ `
( E3 n. z" ?8 q/ C. `KPMG has recently released a comparison of the true Top Federal and Provincial
; s' @* |: f$ D w$ L; U% `Marginal Capital Gains Tax Rates per province. It is very interesting to see5 T% N3 c4 m3 s9 C+ ?3 b, Y
how these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%. F# q( m: [0 b
AB . . . . . . . . 19.5%
) u: H0 x' @& b9 ISK . . . . . . . . 22.0%/ ~- T+ Z, X: x% u, k. ^9 @8 z
MB . . . . . . . . 23.2%0 |/ S9 I7 U) t# e1 V
ON . . . . . . . . 23.2%
* M( g8 g& i- w1 X& {3 E4 rQC . . . . . . . . 24.1%) h: b' i: @* T8 m9 Z
NB . . . . . . . . 23.4%
7 n$ r% j% q- u5 o& s1 M7 uNS . . . . . . . . 24.1%
4 J) H7 q9 Y8 D5 q% E/ m" m H0 EPE . . . . . . . . 23.7%
1 D; r% B) S2 W! E. U X1 g7 WNF . . . . . . . . 24.3%9 p/ e# v/ ~! C" C
) ^* W$ y7 L; c5 C% QLower capital gains tax increases investment and stimulates the long term
# G- k3 T; ]/ @3 E/ [, T1 Meconomy of the province. It also allows real estate investors to keep more of
7 o( ?( I; m3 ktheir profits at exit time. Always a good number to pay attention to.
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# ?/ w) B0 E* Y7 p/ K6 j( ^( bOverall, by staying focused for the next short period of time, you have the( b, g+ y2 m5 Z, B2 ?! O8 M4 W
opportunity to create financial freedom of which others can only dream. Of
* k- D( F, ]- Z9 j' ~course, the key word is focus. And with an August line-up of 'Members Only'. j7 G) w, [ e
events like this, you can't help to become a real estate investment champion
1 I2 f W! X8 _. |( G0 @- e1 D4 jwhen you take action as a full REIN Member.
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" e8 K2 u$ a+ S. b6 B( ^6 cFocus on the fundamentals, keep emotions out of your decisions, and enjoy the7 J6 r |; X. Z1 t! h! L
results in just a few short years. |
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发表于 2006-8-25 08:35
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