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NEW HOUSING PRICE INDEX...9 ?' s7 v+ s% } r$ F
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: T% ^1 N( |- g( n1 QThe New Housing Price Index, has just been released and it provides some very/ K- e A- h! u0 r8 @
interesting insights, not only into where the market has moved, but where it8 h7 J* G& v1 Z
will be going.+ @1 j7 V, l* P+ ~4 r
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It proved, once again, the value of looking at fundamentals behind a market.
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The New Housing Price Index is compiled by Statistics Canada and is used by
0 Q% S+ m3 V) l1 I1 t. H) E) Y; msophisticated investors to see how much the market has moved, as well as an
' ~ |5 }( Y/ J$ findicator of where re-sale home prices will be moving in the coming six months.
$ x' W4 N0 H! T8 |( D- b8 XWe look at the ripple effect that new housing prices have on re-sale property
9 @% G6 N+ D+ n) O. y* X! l* jvalues and can extrapolate what direction re-sale prices will be moving and by8 d0 n. c7 ?% K
how much.
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For instance, for the last three years, we have told investors to avoid Windsor,$ a' V1 J% [( G5 `0 K7 ]
Ontario as an investment area because the underlying fundamentals are not very( g: t' D" Z. P* `5 \' O y7 D
strong. This has been proven once again with the release of the latest
6 c% B$ i! S3 I2 U2 O0 l9 Rfindings. New Housing Prices have actually decreased by .5% during June 2005 -) Y# \/ Y' C2 M/ r, L; J4 R
June 2006 proving that fundamental investing works in helping you pick the best
0 k, Q$ l# E2 L2 c: \) T3 L: ?- mmarkets and avoid the flat ones. This .5% decrease should have little impact/ [9 c6 M5 k$ O W. ^
on average re-sale values in the Windsor region.
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# \( j/ Q* E# Z/ C$ @, c3 dTo contrast this, the fundamentals we discuss are so strong in Calgary that the
3 e, f0 J% s O1 g: m5 vmarket continues to be super heated. With close to 3,000 net new people into
% Q: O* B- R2 R5 j4 F& \the city every month, the property market just can't keep up. That is why we
) ~! }: Q4 c$ J; R; R$ usaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). / T* n" k. y6 _) \
This is great news for the future of re-sale values in the city as these
+ t% k! Y/ ]! H8 fincreases will continue to ripple out into the market for at least the next six$ {% |) T' a f% V5 i3 g, b0 J! }
months. * K f1 n# N7 w0 G) i% {
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Comparing these two regions is a great illustration of the value of not getting9 S6 C. K) i" ^( \ ^
caught in the 'emotional guessing game' by just focusing on the underlying
. G# D* N/ P1 J- K! ]7 ^/ jfundamentals. It is sad to see those people who said in the last 2 years that
. k a, T/ j8 U; g8 fthe Alberta real estate market was over and they were going to sit back and wait
# u( n- G6 U& ^1 Q6 K9 duntil it drops. Quite obviously, they have missed out on AMAZING gains, all9 ~ Q2 d% `, V, d8 b6 \& G
because they didn't follow fundamentals, they just led with their emotions.+ Q. @0 L8 ~0 Z( U1 L' ~: ]- N
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
H F* `7 V1 E6 c2005 to June 2006), also great news.
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( Q/ g! ]7 l9 A9 V, a- ?) PBy comparison across the country, these are the numbers for June 2005 - June4 w+ {7 k; I& r
2006 New Housing Price Index for:
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* k/ t" X& E$ N+ s4 v7 CVancouver . . . . . . . . +5.2%' s8 O; w8 s) b/ `% g. V8 r
Saskatoon . . . . . . . . +8.5%4 B5 I& r- I9 K! s; M4 I; L
London . . . . . . . . . . . +3.0%
( y B% ^- v8 o( {Hamilton . . . . . . . . . . +4.9%
' G" O$ }* b+ \3 q! M3 T5 G+ BSt. Catharines - Niagara . . . . +4.9%) D6 f" r/ Y/ T3 v# n$ U; _6 W
Toronto and Oshawa . . . . . . . +3.2
" N% Z* d" A! FOttawa - Gatineau . . . . . . . . . +3.1%8 H* g$ n U) x
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Fundamental investing ALWAYS makes you look like a genius - emotional investing- z1 H0 I2 q* F4 [9 P9 y; u- d
gives you quick highs, but also quick lows. Well done on your focus!
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+ A" U+ h0 e& B) YAs the fundamentals have been showing all along, the Alberta market continues to
5 p/ t' ~- T& M/ C1 ube strong, as in-migration and job creation continues to attract people from not
6 r0 B T, o& S6 x5 M5 `only across Canada, but from around the world. Our average wages are% ~# h) U% r6 d: J
increasing, our population is increasing, our unemployment rate continues to
% \" ~ @9 ^( ?* k" Pdrop 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 strong5 x0 C, U/ D/ O# w2 T
fundamentals:
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! E- n; n0 S# Q! F% a) B# H1. The Conference Board of Canada is forecasting strong economic growth in
* [" F5 F* ]$ ^4 U* uCanada, with Alberta once again leading the way. In fact, the projected growth0 n! i& u4 u" x4 X" E: q
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and& n6 M* t3 `. e; M5 t
this is slated to occur even with the labour shortages we are witnessing. M; |/ D% o* q+ I, U
! ~. ]7 o! W6 ]0 y B: d2. People are discovering Canada as an investment center from all over the6 c0 T7 e/ a4 D- R+ g& y
world. Recently, there have been investors coming here from Asia, Australia,! e" E0 i/ y1 y5 p. J+ w. u
the US, UK and Europe. In fact, if you review the world's press you will see2 u1 m" t$ F _( Z: F
that 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
, i% W# w: i& i$ }' Katmosphere (including Why Alberta - Why Now") to a group of major investors in
. w+ ?; B( H' W0 ]2 H8 JDublin, Ireland, and the response was overwhelmingly positive. In fact, after% L( e' R M+ T
Don presented the economic facts, many of these investors (who could invest5 h. K; W6 m: g
anywhere in the world) have already booked their flights to here. Once again7 P) S. K ~0 q6 {5 ?3 d# ^9 J
proving that when the true numbers of our economy are presented (along with the* A9 _4 Y2 H. }8 B* a
political stability of our country), there is no place in the world that can
( F% [) u, _# `5 sbeat it for long term investment.( d& z; @% Q. R) ^) R
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4. Job creation continues to be strong (with a small lull in June); definitely
' }' }$ Y+ e0 i r' ]a sign of strong long-term fundamentals. RBC has also been following the job) w8 x# M: k# u8 L9 ?! n
creation situation and here is what they are saying: (www.rbc.com/economics)
8 m( f! @; w+ r9 C4 _, |"After generating a substantial 96,700 jobs in May, the largest such gain since9 c, N2 ^& G9 K7 {! j2 H' r. o8 R- m. a
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
' z4 S$ V% T2 K( u2 {2 wfirst half of 2006, a feat not matched since the second half of 2002. With the1 {7 p( H; h. Z& L# ^$ {! \8 A
economy widely expected to grow at a more moderate pace in the second half of
. L, p5 O5 i4 Ethe year on the back of slowing trade activity, this impressive showing may not- W8 z0 f1 N8 C) Y/ k
repeat itself. We expect that employment grew in July at a pace consistent with
" i* F2 M0 I. ]% d3 V) W3 e$ \its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
7 Q1 R$ ?' t- ~1 j3 V0 u8 \/ Z6 s! kits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate- i, M( {% ?$ j2 e
of 6.1%." Overall very good news. Now the key is to ensure that the region in6 v9 M# Y2 i1 t9 _' W
which you are investing is continuing to generate jobs and increasing incomes.( Z D2 P9 Y7 t+ u; R; `; [* Z
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In other words, it is a great time to be taking advantage of this strong) q* q0 u. _. a9 p: w
economy, avoiding 'excuses' and to especially not listen to the uninformed/ F5 M6 p K5 M& ~7 |& O9 c$ Y; m" q0 k
'dream stealers.' As long as you stick with your game plan, you continue to do
5 {5 F2 E% u. u5 m- qyour due diligence, and you remove emotions from the equation, you will see the
3 V5 L* f" m) D( \opportunities that are right in front of you, right here in Alberta. Let the
9 o& k/ y+ {; B+ x' w* E'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
5 t: {0 `7 s$ L0 I1 L/ O/ Wand your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison.$ b7 s( J4 b1 _9 J' n9 ?: i
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KPMG has recently released a comparison of the true Top Federal and Provincial
5 E/ N0 N; U8 ^7 A! Y. A' I0 ?' nMarginal Capital Gains Tax Rates per province. It is very interesting to see
6 \' p( j* m6 `! m6 V) v' ehow these will affect your exit strategy. Here are the numbers:7 J9 |# ~: }! P n D6 B
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BC . . . . . . . . 21.9%* b2 O) n+ d5 T2 _3 a& X- P# u
AB . . . . . . . . 19.5%. S/ R% L% H4 K, Y7 M0 @
SK . . . . . . . . 22.0%' O; }% [1 f3 M; ^, D8 X5 n5 A3 J
MB . . . . . . . . 23.2%- h) N, G+ q9 N9 f% O
ON . . . . . . . . 23.2%
1 h7 ?1 a; F- P* iQC . . . . . . . . 24.1%
7 b8 }! e' ?. M7 {NB . . . . . . . . 23.4%) J! D0 ]& j9 O' p, C" d B& D
NS . . . . . . . . 24.1%
0 B3 u( `6 R D" s$ qPE . . . . . . . . 23.7%& k. F; }1 \: ^! |
NF . . . . . . . . 24.3%0 k3 p% Z) n( @+ L A, r- N7 f
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Lower capital gains tax increases investment and stimulates the long term
; c) V3 Y; S' [" t: _economy of the province. It also allows real estate investors to keep more of1 w. r; |0 k, a# R2 [" l
their profits at exit time. Always a good number to pay attention to.7 K) X% o# l5 k
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0 d3 P" ^; n4 v0 Q2 ^/ J0 rOverall, by staying focused for the next short period of time, you have the
. C$ H5 P6 W" d8 P6 Z; ropportunity to create financial freedom of which others can only dream. Of
% t" ]- X* ]0 F% Q! mcourse, the key word is focus. And with an August line-up of 'Members Only'
5 b9 s* `, ], P/ nevents like this, you can't help to become a real estate investment champion- x! r. ?) ]5 c' r/ ^0 p4 K
when you take action as a full REIN Member.
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the
- a2 l, b/ {1 I. P+ C% s! Vresults in just a few short years. |
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发表于 2006-8-25 08:35
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