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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
9 T/ ]/ D$ c2 a% [interesting insights, not only into where the market has moved, but where it0 U6 q% Y" A, e1 o$ N" m8 d6 o
will be going.
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4 X5 f( b$ M) W$ _5 UIt proved, once again, the value of looking at fundamentals behind a market.3 ^4 K5 I- L. W& a5 M u) B$ |
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The New Housing Price Index is compiled by Statistics Canada and is used by) _! }2 |/ j! V4 |2 x
sophisticated investors to see how much the market has moved, as well as an
9 B& L- r2 F' I: T$ lindicator of where re-sale home prices will be moving in the coming six months. . W* c4 i8 W# e/ Z+ i2 U5 E+ P
We look at the ripple effect that new housing prices have on re-sale property7 A2 _# n0 B, P# x
values and can extrapolate what direction re-sale prices will be moving and by7 g, B ?7 A; j8 x6 M
how much.0 Q5 K( q: _* t7 H
8 J, J2 m& ~- u! V" X( EFor instance, for the last three years, we have told investors to avoid Windsor,
1 N, X" f% h( N/ W. E/ p$ G h# q J& SOntario as an investment area because the underlying fundamentals are not very
0 `" ?, ~% D; t9 _+ qstrong. This has been proven once again with the release of the latest
, [1 ^; u2 v: c1 t) C+ V0 o4 Wfindings. New Housing Prices have actually decreased by .5% during June 2005 -0 z5 v" t3 `9 g" ]9 c h
June 2006 proving that fundamental investing works in helping you pick the best, ~% V, ^5 }' ?$ o
markets and avoid the flat ones. This .5% decrease should have little impact
: A3 B* U" G5 S6 ]1 z5 o0 R1 Z1 }9 non average re-sale values in the Windsor region.$ f7 R: h& ~9 `# b- O# I
7 p" x+ O5 H9 s' p0 P6 kTo contrast this, the fundamentals we discuss are so strong in Calgary that the
! D; X6 A) J1 S6 n* A# L7 S, O% j6 i1 Ymarket continues to be super heated. With close to 3,000 net new people into5 i* d, y: d5 M2 U6 z0 A x
the city every month, the property market just can't keep up. That is why we8 B( A8 p2 Y+ U
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
: v- q3 D2 b/ _5 A! g2 DThis is great news for the future of re-sale values in the city as these
( r/ B f" A8 W" O Lincreases will continue to ripple out into the market for at least the next six
! ]# _5 `& r7 Q: Emonths.
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; L& q ^- \1 K% }: [Comparing these two regions is a great illustration of the value of not getting- M6 q( ]$ y( _2 s2 W( F' v' f2 O
caught in the 'emotional guessing game' by just focusing on the underlying# D5 J, i" H2 y) N
fundamentals. It is sad to see those people who said in the last 2 years that
t/ f& Q I1 r: O, Z: Q3 w* N: @the Alberta real estate market was over and they were going to sit back and wait
3 ~7 P2 e# |+ Z4 }# S/ I, Tuntil it drops. Quite obviously, they have missed out on AMAZING gains, all
1 e" s+ S; G" ^; j l5 g/ Gbecause they didn't follow fundamentals, they just led with their emotions.' M) z) q8 s# b& U b* h
5 W4 Y& P" n- p% ~, f1 K: x s! ~By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
; z3 ~% }1 Y. j9 T* t: [+ `2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June
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3 p) [( e/ t' B1 JVancouver . . . . . . . . +5.2%
$ \, {5 |& U0 h% X) wSaskatoon . . . . . . . . +8.5%
% t; N, e/ D+ f5 r# e+ _( ~5 uLondon . . . . . . . . . . . +3.0%
) u5 B9 c. l# v" jHamilton . . . . . . . . . . +4.9%) o# e( \6 Y2 e0 t/ B$ _
St. Catharines - Niagara . . . . +4.9%
% L3 u, J* H1 K, U3 p+ \; Z+ `Toronto and Oshawa . . . . . . . +3.2/ y' u' W; R( s( N' |
Ottawa - Gatineau . . . . . . . . . +3.1%
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2 i. i7 f* z$ p4 U- c8 r4 i' C% }% P8 eFundamental investing ALWAYS makes you look like a genius - emotional investing: s( L5 u' g) s& Z9 U. o; Z
gives you quick highs, but also quick lows. Well done on your focus!6 g6 q* S. P( ^* }
) |$ R( c1 ? H# p1 P$ O. ?As the fundamentals have been showing all along, the Alberta market continues to
+ a, \* s. y/ _ Y/ k- |2 u vbe strong, as in-migration and job creation continues to attract people from not. D! L6 z* C3 I' a+ @
only across Canada, but from around the world. Our average wages are+ K% b w1 z* Z5 E+ L+ ?
increasing, our population is increasing, our unemployment rate continues to
3 m6 u$ `6 s2 mdrop and our GDP growth is slated to once again lead the country.* s$ y+ a0 V, S9 E! o
/ }) J$ ^# } m) I3 M; ]$ rHere are some very interesting facts that are helping to support the strong9 E6 j$ y! T' ]
fundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in
9 O A/ E6 [: K" s. v1 {+ ACanada, with Alberta once again leading the way. In fact, the projected growth7 v" `, S3 r; F: n; p% P
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
7 ?3 b' I9 K6 C( P. Othis is slated to occur even with the labour shortages we are witnessing.! t, H$ Y' ^& z9 b
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2. People are discovering Canada as an investment center from all over the: A+ V$ ]+ r* ?1 S: t
world. Recently, there have been investors coming here from Asia, Australia,
; t% r1 @0 h& |; Y9 Ythe US, UK and Europe. In fact, if you review the world's press you will see
# @ f' V6 B; c3 \( Qthat Canada (with a focus on Alberta) is being discussed more frequently. # |4 G* N7 Z: F8 |& u7 I6 A+ H
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3. Don Campbell has just returned from presenting our Canadian investment6 E, @ o) E" b" v# k. K9 P
atmosphere (including Why Alberta - Why Now") to a group of major investors in
/ p- [% p0 C9 w2 S; H& XDublin, Ireland, and the response was overwhelmingly positive. In fact, after
8 a$ v- G' \8 R( ^4 ^Don presented the economic facts, many of these investors (who could invest' S" R- r/ U1 N# u; d
anywhere in the world) have already booked their flights to here. Once again' [5 \: e! [+ @' ~
proving that when the true numbers of our economy are presented (along with the
, u) Z; a$ y& E/ bpolitical stability of our country), there is no place in the world that can
; q" z9 X5 V7 T7 } r+ t/ U% Xbeat it for long term investment." K& ]2 P- k( V( y- p! P
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4. Job creation continues to be strong (with a small lull in June); definitely8 T- H0 ^2 X. U4 H, ^
a sign of strong long-term fundamentals. RBC has also been following the job
& k$ o* a: i3 R1 ccreation situation and here is what they are saying: (www.rbc.com/economics)
5 u( v o- K! Q" G$ @3 ]( ^"After generating a substantial 96,700 jobs in May, the largest such gain since
4 p& N2 b$ x7 \! x3 L$ KJanuary 2002, the economy lost a modest 4,600 jobs in June...
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$ ?8 p! D6 J# E. ^Strength in the Canadian economy contributed to a gain of 215,600 jobs in the
$ w- p% [- @1 @1 jfirst half of 2006, a feat not matched since the second half of 2002. With the E& R# g/ Z3 h/ s3 \
economy widely expected to grow at a more moderate pace in the second half of
7 ~$ n1 E1 C( o. V5 M- G* _: wthe year on the back of slowing trade activity, this impressive showing may not
& E: |" s- W+ q7 h8 h( z# R" w5 Arepeat itself. We expect that employment grew in July at a pace consistent with& Y+ ^* |8 g4 }2 |
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
: `9 X7 V9 A% D3 [its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
3 Q* m# E8 Q) b1 @+ } oof 6.1%." Overall very good news. Now the key is to ensure that the region in+ E% N5 S6 o! d$ P% |, b+ M! b
which you are investing is continuing to generate jobs and increasing incomes.. b! R% \$ j% Z
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In other words, it is a great time to be taking advantage of this strong
# N5 d) I+ \) }7 ieconomy, avoiding 'excuses' and to especially not listen to the uninformed$ O7 @/ J, y; i2 Z0 F8 I
'dream stealers.' As long as you stick with your game plan, you continue to do% p+ B: a, y# h B
your due diligence, and you remove emotions from the equation, you will see the
, ^, m; l& e" s7 N" F6 K2 ?opportunities that are right in front of you, right here in Alberta. Let the% | t5 l5 y7 G6 z1 N4 R
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
& a3 R9 W/ F4 o" Q# @: ], _; Oand your financial freedom has surpassed even your wildest expectations.# X8 m4 t- D* s n' O
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Capital Gains Comparison.
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KPMG has recently released a comparison of the true Top Federal and Provincial
' ~, [3 H! I. d" m+ K- L0 CMarginal Capital Gains Tax Rates per province. It is very interesting to see
. k0 B. C4 V6 ?& Qhow these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%+ k* [, X+ z2 o2 S
AB . . . . . . . . 19.5%
5 |+ W, l" b) @* nSK . . . . . . . . 22.0%
4 i2 g$ U5 p/ K5 MMB . . . . . . . . 23.2%4 g* j: ?, }5 r4 }" X6 _5 O- ~
ON . . . . . . . . 23.2%% E$ a5 A" Y' U: u& t2 ]/ t6 P7 I) E
QC . . . . . . . . 24.1%7 Q! o w4 I ]% ~, r) L0 n: W$ {7 g, |0 D
NB . . . . . . . . 23.4%. b/ q7 q' g: h7 q3 C
NS . . . . . . . . 24.1%
5 V4 O, b# U+ d: `3 ]PE . . . . . . . . 23.7%/ I* b2 o' i P7 w. W+ N
NF . . . . . . . . 24.3% h$ \9 @! C/ S2 w# P/ S
6 Z C& s" [8 k2 O5 B! bLower capital gains tax increases investment and stimulates the long term, C3 E- d; U5 {1 u
economy of the province. It also allows real estate investors to keep more of/ F5 W% {: x" w% J8 c
their profits at exit time. Always a good number to pay attention to.2 }- M8 v, ~3 ]6 y6 ~& v( }
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Overall, by staying focused for the next short period of time, you have the
9 e( h2 B+ a; t; E5 k" Eopportunity to create financial freedom of which others can only dream. Of
) F& m% @- e3 [9 O- ]course, the key word is focus. And with an August line-up of 'Members Only'4 t. {$ S) u) h
events like this, you can't help to become a real estate investment champion4 k: Y+ M# B! ~ w" `+ }8 d# o* y( m
when you take action as a full REIN Member.& l% a/ B# T' \/ n0 P6 |( G1 P& ~
# F+ n8 o9 J! r) ^" `! ~Focus on the fundamentals, keep emotions out of your decisions, and enjoy the- O X$ z" u: Z! `' {$ s V; v
results in just a few short years. |
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发表于 2006-8-25 08:35
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