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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 c$ \1 L- c1 ^* e) r0 S
interesting insights, not only into where the market has moved, but where it
* @4 b! V# k: L) C2 K8 Bwill be going.9 _$ D( H8 R% u; n5 o8 S5 o
/ o4 H7 g, u; y, D! c, r2 \2 _It proved, once again, the value of looking at fundamentals behind a market.+ K$ Y5 n0 y3 @! F0 b
; }0 O' x# T2 h7 A; g' C: ]0 i! tThe New Housing Price Index is compiled by Statistics Canada and is used by0 z1 Q/ U# V7 U
sophisticated investors to see how much the market has moved, as well as an q% d- W$ w. y% J
indicator of where re-sale home prices will be moving in the coming six months. ' [5 i' `+ P0 X C
We look at the ripple effect that new housing prices have on re-sale property3 w, G7 J0 ^+ O( } A& j
values and can extrapolate what direction re-sale prices will be moving and by
2 |' [0 ?5 ~8 E; p) {how much.% |: t% S- u/ x: {8 s) u8 f1 C, d
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For instance, for the last three years, we have told investors to avoid Windsor,* g# W5 d- n' l8 |2 Q) p& T+ `
Ontario as an investment area because the underlying fundamentals are not very
5 Q3 ]! T) C' p* k8 P9 qstrong. This has been proven once again with the release of the latest+ m5 p0 G/ H: n8 {/ X
findings. New Housing Prices have actually decreased by .5% during June 2005 -9 q" Z3 k) ~! k) R8 [1 C4 Z/ n; Y
June 2006 proving that fundamental investing works in helping you pick the best
* L3 G5 N7 w* ?0 O: l% Emarkets and avoid the flat ones. This .5% decrease should have little impact1 K: Y$ I' a1 W! G6 k
on average re-sale values in the Windsor region.: w3 N& J- g" L4 P; D+ Q$ F
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To contrast this, the fundamentals we discuss are so strong in Calgary that the
' `0 _, \' J. s7 R: R F( ^market continues to be super heated. With close to 3,000 net new people into
* h: r+ g# X/ S" ~" jthe city every month, the property market just can't keep up. That is why we
5 {! `6 r5 p' L, s# P: D4 Z& t7 T Rsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). . a+ e' Z1 v9 A9 l
This is great news for the future of re-sale values in the city as these9 p5 T' T) x# N f( L
increases will continue to ripple out into the market for at least the next six( z: K5 y; e7 j7 j% |
months.
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Comparing these two regions is a great illustration of the value of not getting
: t. Z# @2 H5 _3 n# f) Lcaught in the 'emotional guessing game' by just focusing on the underlying. N4 N" Z4 Y. h: l! B5 n* P
fundamentals. It is sad to see those people who said in the last 2 years that
% A( L0 k, N3 H& X; {& xthe Alberta real estate market was over and they were going to sit back and wait6 N0 N3 u& t: P. K- m: q& U
until it drops. Quite obviously, they have missed out on AMAZING gains, all
g+ s& d( j1 ~" S! fbecause they didn't follow fundamentals, they just led with their emotions.$ O7 y# T9 _& V; D5 O3 q' l
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June! O" p/ ?1 l* }- d4 ~+ W# o
2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June4 g+ N0 K+ d0 ?' U
2006 New Housing Price Index for:* E: |( v N/ H8 g( ]' t
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Vancouver . . . . . . . . +5.2%! p* R* W* T2 `# W+ n% [' [+ m# V
Saskatoon . . . . . . . . +8.5%
* [3 M) I# ~5 \London . . . . . . . . . . . +3.0%
" k8 G# d0 S4 d! e ~, sHamilton . . . . . . . . . . +4.9%
5 ? `, o: t( qSt. Catharines - Niagara . . . . +4.9%
/ T8 J U4 b' p; `5 g; F9 pToronto and Oshawa . . . . . . . +3.2
' G* V+ p8 R7 k$ Y3 QOttawa - Gatineau . . . . . . . . . +3.1%
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Fundamental investing ALWAYS makes you look like a genius - emotional investing
# y! d% K N$ B0 I; _1 |6 ngives 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
) n$ U; H. D R1 f: y: E3 E1 A! Bbe strong, as in-migration and job creation continues to attract people from not
5 O, s. Z' c! M, m- w7 eonly across Canada, but from around the world. Our average wages are
: e. y+ j/ G9 r6 Z. L- X! @increasing, our population is increasing, our unemployment rate continues to+ Y" S& c& n$ n# q3 Q9 X @# i
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 strong3 n3 q) Q! p" o
fundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in0 f- j! c: ]- ^
Canada, with Alberta once again leading the way. In fact, the projected growth0 C! F" _. Q- V+ X2 q6 a: u
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and0 S. a5 Y6 ], I A8 A
this is slated to occur even with the labour shortages we are witnessing./ I0 e; B: h- P
/ c" N2 }/ t5 p, W$ Y# U2. People are discovering Canada as an investment center from all over the
" h! R3 R; e# U( }) n+ Iworld. Recently, there have been investors coming here from Asia, Australia,2 H1 u0 D! U R7 b; Z r8 v6 r
the US, UK and Europe. In fact, if you review the world's press you will see
2 E$ n9 Q- U+ X/ R( Gthat Canada (with a focus on Alberta) is being discussed more frequently.
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8 b! _! N( b2 @0 o1 p4 O3. Don Campbell has just returned from presenting our Canadian investment
" d" f# A( A8 k# b/ G$ o' oatmosphere (including Why Alberta - Why Now") to a group of major investors in
; Y- f0 D8 Q4 \7 PDublin, Ireland, and the response was overwhelmingly positive. In fact, after
, ^8 {) |, g6 } F8 h8 L# qDon presented the economic facts, many of these investors (who could invest% H8 g2 `( l2 W) X1 Q1 M; i
anywhere in the world) have already booked their flights to here. Once again# E! z& ?; p, C$ | H& d/ r
proving that when the true numbers of our economy are presented (along with the
& t- q, P: \ `3 n6 Cpolitical stability of our country), there is no place in the world that can
- ~7 m6 T j `$ ^ {* [* J6 \beat it for long term investment.5 ]$ d6 v# |/ d/ p; d
7 q) J' c( J. A4 y% K, ]9 ]1 Q; w4. Job creation continues to be strong (with a small lull in June); definitely
$ g9 }! m2 h- B! Q& ~9 Oa sign of strong long-term fundamentals. RBC has also been following the job! {5 m, [7 N0 C
creation situation and here is what they are saying: (www.rbc.com/economics)1 ~* L- N; {4 q! C1 F$ d; g1 Q9 N
"After generating a substantial 96,700 jobs in May, the largest such gain since: |9 B/ v' ^8 ^& k
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
/ j# }* J+ y2 }- m4 ?5 tfirst half of 2006, a feat not matched since the second half of 2002. With the- b* u$ X3 r+ t. I6 W
economy widely expected to grow at a more moderate pace in the second half of; i& n3 {# {5 k/ ^! ?
the year on the back of slowing trade activity, this impressive showing may not9 y# M4 g$ l& v0 f( q# K* E: w1 k7 ^
repeat itself. We expect that employment grew in July at a pace consistent with
, F- R$ w4 q' x b" y6 m) d& cits recent trend of 24,000 jobs a month. Assuming that the labour force grew at
! M) q3 e) G" y2 e4 Mits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate6 l4 d \* }- l6 S, @" R
of 6.1%." Overall very good news. Now the key is to ensure that the region in- M, I+ r% i; B' w% S1 n2 e% i0 e
which you are investing is continuing to generate jobs and increasing incomes." _) ~# S: U' [& I& S
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In other words, it is a great time to be taking advantage of this strong
$ ?. q- c! a- v9 u1 c/ `economy, avoiding 'excuses' and to especially not listen to the uninformed: s4 c( I8 _$ A" t
'dream stealers.' As long as you stick with your game plan, you continue to do
2 J; O/ X$ e' C3 ^+ X: e8 Iyour due diligence, and you remove emotions from the equation, you will see the {0 U9 u' }( ~, r% f( x9 o
opportunities that are right in front of you, right here in Alberta. Let the! w. Q/ Z' r( }$ ~3 w2 P; j- @) I
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared s* P) N X1 W$ L
and your financial freedom has surpassed even your wildest expectations./ W0 m7 c& @- }" \1 I9 i2 l6 E: H8 h/ z
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& k0 Z2 x4 W' D2 Z1 L! J2 |# RCapital Gains Comparison.4 J0 C/ W" H8 g7 {$ q) ~: a
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KPMG has recently released a comparison of the true Top Federal and Provincial
8 h8 }3 f; i6 K6 C( R6 RMarginal Capital Gains Tax Rates per province. It is very interesting to see
" q4 F5 f- y4 A9 k) Lhow these will affect your exit strategy. Here are the numbers:& h& [8 x9 N$ F! M# z+ y0 m
6 N8 Z4 \, r- D+ x+ X& M/ sBC . . . . . . . . 21.9%
; ]! h6 j3 G, R% cAB . . . . . . . . 19.5%0 i; U5 [1 w* S0 a5 @7 G8 w* C
SK . . . . . . . . 22.0%- ^7 w" y6 _9 Q# D* m
MB . . . . . . . . 23.2%
% ]. C1 i4 ]; I, k* z; ~ON . . . . . . . . 23.2%
) E& `7 ^/ v9 G nQC . . . . . . . . 24.1%
* P/ I a& w. Z: ]- p9 gNB . . . . . . . . 23.4%
" F% I0 L8 c( F! _# t8 ]# MNS . . . . . . . . 24.1%
. x: ^0 w* N+ \' s/ s+ C$ l4 MPE . . . . . . . . 23.7%
' c/ x y$ t$ P: h. V- \NF . . . . . . . . 24.3%
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5 n, X5 c6 q5 SLower capital gains tax increases investment and stimulates the long term
& u8 M$ y5 O: N* `economy of the province. It also allows real estate investors to keep more of
# C4 q4 j' f5 T4 ?their profits at exit time. Always a good number to pay attention to.
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Overall, by staying focused for the next short period of time, you have the7 y5 l e4 X7 B0 V) |
opportunity to create financial freedom of which others can only dream. Of
5 j/ V5 M# n5 a( z' Lcourse, the key word is focus. And with an August line-up of 'Members Only'
$ O8 @: C% x# L# F1 devents like this, you can't help to become a real estate investment champion7 q' H+ [5 a! a3 W8 R
when you take action as a full REIN Member.
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( R& D1 W1 @* h9 \, JFocus on the fundamentals, keep emotions out of your decisions, and enjoy the2 z$ j7 z7 B' `* z! I, f$ _0 w
results in just a few short years. |
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发表于 2006-8-25 08:35
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