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NEW HOUSING PRICE INDEX...9 K2 A j d' U0 Z( F
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The New Housing Price Index, has just been released and it provides some very
) @8 R2 q1 t D1 `( Ninteresting insights, not only into where the market has moved, but where it3 ^4 w1 ~$ h: m1 B) [, h
will be going.
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It proved, once again, the value of looking at fundamentals behind a market.' z2 W q' s! Y8 s( O* {
0 Y1 T# A$ ?- ~" F% x0 pThe New Housing Price Index is compiled by Statistics Canada and is used by0 j, E( s; J& H" A% j
sophisticated investors to see how much the market has moved, as well as an* L. m7 B$ R, [3 Y9 v
indicator of where re-sale home prices will be moving in the coming six months. g1 c; P0 U! _1 F* Z3 j" {4 Z
We look at the ripple effect that new housing prices have on re-sale property
$ N3 I7 t M" c& m! X; Ovalues and can extrapolate what direction re-sale prices will be moving and by& q$ G/ t& V z, r6 X3 F; G s
how much.2 x2 s. C) r* T& Z
5 `1 x- Z6 C6 \For instance, for the last three years, we have told investors to avoid Windsor,. G0 j$ ?& ^; _3 Z# t
Ontario as an investment area because the underlying fundamentals are not very+ i& q8 n. _; m# V% k1 |% [0 P. z8 X! `$ i
strong. This has been proven once again with the release of the latest
1 C6 x$ w+ s; y! |7 p1 Jfindings. New Housing Prices have actually decreased by .5% during June 2005 -0 l3 l u. d' X5 l; d- _
June 2006 proving that fundamental investing works in helping you pick the best
5 T. k: ^- Z" J/ l9 Umarkets and avoid the flat ones. This .5% decrease should have little impact- C+ |$ ~. P" F9 x7 B
on average re-sale values in the Windsor region.+ a$ K+ ?( ^8 t/ U0 O) U
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To contrast this, the fundamentals we discuss are so strong in Calgary that the- w( q3 J+ Y' e' V' l" A
market continues to be super heated. With close to 3,000 net new people into+ c3 f$ T J" A4 W& T0 J
the city every month, the property market just can't keep up. That is why we
% E; A0 s- L8 Csaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
% y8 v* e3 C- Z0 JThis is great news for the future of re-sale values in the city as these
1 C2 A7 m1 z' C) Dincreases will continue to ripple out into the market for at least the next six3 p4 F1 i$ V7 F/ s& {+ o
months.
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Comparing these two regions is a great illustration of the value of not getting. j6 Q5 z8 C, e; N0 Y2 ]
caught in the 'emotional guessing game' by just focusing on the underlying
2 \/ _) U, ]) M. X& j/ A; Jfundamentals. It is sad to see those people who said in the last 2 years that2 g' d4 s9 g' s
the Alberta real estate market was over and they were going to sit back and wait4 t6 u( e1 F/ H& L% r& K
until it drops. Quite obviously, they have missed out on AMAZING gains, all
- y1 |4 ?8 A% V* ~) d+ {: Hbecause they didn't follow fundamentals, they just led with their emotions.
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5 Y. ~% G9 B' i: R* CBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June6 q( X/ P) D3 `1 ^( J' A. @- r
2005 to June 2006), also great news.$ s: a+ P% I S5 U2 }
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By comparison across the country, these are the numbers for June 2005 - June* m, n& d: o" x r8 ~* _
2006 New Housing Price Index for:
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Vancouver . . . . . . . . +5.2%
0 L' e- J+ T$ W; ]Saskatoon . . . . . . . . +8.5%/ W4 h5 `0 U' l4 r4 h
London . . . . . . . . . . . +3.0%
/ f5 z' b) F: g7 E" Z: `4 P" T9 {Hamilton . . . . . . . . . . +4.9%
" A; _! W* E& s8 u- E$ iSt. Catharines - Niagara . . . . +4.9%
6 V) ^8 p a1 f' O; VToronto and Oshawa . . . . . . . +3.2
7 s, s9 B* k1 [: g4 Q7 e; fOttawa - Gatineau . . . . . . . . . +3.1%" T4 L1 P% l4 H$ C
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Fundamental investing ALWAYS makes you look like a genius - emotional investing
/ \3 M' b; I) }; Y+ x- Bgives 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* a8 A. w2 T' q& @8 ]- j0 [
be strong, as in-migration and job creation continues to attract people from not3 U4 P I# O3 H; H4 }% g; o. l0 H* M
only across Canada, but from around the world. Our average wages are, ? o3 S8 W, W! J; E1 x4 o# r: i' h
increasing, our population is increasing, our unemployment rate continues to
0 a: P8 R5 c, }drop and our GDP growth is slated to once again lead the country. K+ M" v+ E- S- F9 ?. ?9 x
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Here are some very interesting facts that are helping to support the strong
- n: C+ {* k( F5 L6 rfundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in' P; G+ S& s! F2 U+ `5 Y' M
Canada, with Alberta once again leading the way. In fact, the projected growth
3 h {! O! J/ u& dfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
* Z6 M* y+ V! p. W# Z; Zthis is slated to occur even with the labour shortages we are witnessing.
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2 L! E3 i6 f7 c2. People are discovering Canada as an investment center from all over the
) U, z) |4 C# v) d# u# v# Wworld. Recently, there have been investors coming here from Asia, Australia,
3 o5 G5 j/ b4 Q& Dthe US, UK and Europe. In fact, if you review the world's press you will see
F& [+ b6 I, U; K/ s8 P# }+ C3 }5 {$ P5 pthat Canada (with a focus on Alberta) is being discussed more frequently.
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3. Don Campbell has just returned from presenting our Canadian investment
8 b2 L/ [; d" c* m* ?6 xatmosphere (including Why Alberta - Why Now") to a group of major investors in
6 R8 ^% F% P. A8 T! @Dublin, Ireland, and the response was overwhelmingly positive. In fact, after& K6 c, j1 w, g2 o
Don presented the economic facts, many of these investors (who could invest- @( L: `9 a( m J
anywhere in the world) have already booked their flights to here. Once again
; H- ~, V2 U: u S; C" G. fproving that when the true numbers of our economy are presented (along with the! a% f& u4 O/ O' {5 `* _) c
political stability of our country), there is no place in the world that can
8 F; ?, v |- H9 X# S$ Zbeat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely- w4 t$ K2 G+ f f3 y Q: w
a sign of strong long-term fundamentals. RBC has also been following the job, x. y- @$ s0 \
creation situation and here is what they are saying: (www.rbc.com/economics)
- ~& F+ E0 l4 J/ p& Q"After generating a substantial 96,700 jobs in May, the largest such gain since. h* M0 e8 E; s; G
January 2002, the economy lost a modest 4,600 jobs in June... 7 i( L) h7 ]( D# i% ^; X
4 y0 M, ?0 B6 x0 oStrength in the Canadian economy contributed to a gain of 215,600 jobs in the* ~5 D+ N) @( h0 _( x
first half of 2006, a feat not matched since the second half of 2002. With the
$ c+ F7 L3 m' ^: Teconomy widely expected to grow at a more moderate pace in the second half of
. t3 M5 M, W0 i+ X' d7 |! t: dthe year on the back of slowing trade activity, this impressive showing may not# {$ s8 ~/ j; H$ {6 R9 D, L
repeat itself. We expect that employment grew in July at a pace consistent with
6 `$ K4 T" L+ Aits recent trend of 24,000 jobs a month. Assuming that the labour force grew at& C5 C3 o8 y8 j5 W$ i+ C) Z
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate0 E6 I$ b/ y- ?, e8 K
of 6.1%." Overall very good news. Now the key is to ensure that the region in" _) e: g$ |5 y6 C2 V
which you are investing is continuing to generate jobs and increasing incomes.( o. u) N, U1 p/ C& u& S( }
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In other words, it is a great time to be taking advantage of this strong" Y! X* _& k% u0 f
economy, avoiding 'excuses' and to especially not listen to the uninformed
5 w% T0 K6 s1 V( z" R1 w+ o2 ^'dream stealers.' As long as you stick with your game plan, you continue to do6 F/ T( ^% z; Q
your due diligence, and you remove emotions from the equation, you will see the6 N' t* @% ?$ j
opportunities that are right in front of you, right here in Alberta. Let the
; @ B4 c; I( H$ q( A/ z( L'dream stealers' call you 'lucky' 5 years from now as your net worth has soared: v: c! a) T4 g: t
and your financial freedom has surpassed even your wildest expectations.2 k4 Q: x# j: }
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Capital Gains Comparison.% r( w- L; s1 p/ d! @; e( h/ z3 i
( `/ N. E. X4 wKPMG has recently released a comparison of the true Top Federal and Provincial0 s* S+ O6 X) s4 t5 j
Marginal Capital Gains Tax Rates per province. It is very interesting to see6 L: X, y h. V. r7 m
how these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%6 q" `$ E- E5 \0 a1 [
AB . . . . . . . . 19.5%+ V. Y, w0 b" l& O+ t7 {( z
SK . . . . . . . . 22.0%
|3 d. F6 ]2 Z. a0 F8 M, l1 lMB . . . . . . . . 23.2%( z2 f) V* g2 g
ON . . . . . . . . 23.2%; T! A$ }' E, a& B# W' l0 R1 `' Z
QC . . . . . . . . 24.1%
- r3 P/ U0 }9 l1 f8 J' l& cNB . . . . . . . . 23.4%
5 _, z( M( d' N% oNS . . . . . . . . 24.1%7 B% B9 |. W- r( \! [
PE . . . . . . . . 23.7%
! F4 m5 v/ e( c I# ^NF . . . . . . . . 24.3%
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9 S2 Y/ J. }$ K+ e8 Q, wLower capital gains tax increases investment and stimulates the long term
$ [2 e: U: Q7 i9 l( D( [2 V7 Zeconomy of the province. It also allows real estate investors to keep more of6 a/ J& \" e) R0 u% T/ ~
their profits at exit time. Always a good number to pay attention to.: w. g4 C: R4 b* s( [3 E
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6 T# K. e$ H2 z# k6 F$ wOverall, by staying focused for the next short period of time, you have the* @) E8 J6 k& ^8 e; D2 r2 |
opportunity to create financial freedom of which others can only dream. Of0 u) _3 J3 Z/ e
course, the key word is focus. And with an August line-up of 'Members Only'7 l& D1 L* D4 l' k
events like this, you can't help to become a real estate investment champion. j- G. q# @' n. g) M
when you take action as a full REIN Member.- T- m5 ~/ r8 V7 N2 b
9 h: N+ o$ x. y! ]; `$ u/ JFocus on the fundamentals, keep emotions out of your decisions, and enjoy the
7 P, A7 h% y& o- g% E+ H4 Xresults in just a few short years. |
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发表于 2006-8-25 08:35
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