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NEW HOUSING PRICE INDEX...
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- y+ t# N# C6 u. ^3 KThe New Housing Price Index, has just been released and it provides some very& e, y" h; C: z0 j/ ^
interesting insights, not only into where the market has moved, but where it: Y& x( w4 W6 v/ N+ p9 r p
will be going.
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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
6 T" a( w8 ~+ P% l7 nsophisticated investors to see how much the market has moved, as well as an
) i9 L6 P& l$ M" b0 \2 w! y/ S) iindicator of where re-sale home prices will be moving in the coming six months.
8 ~7 @: O. d2 X0 E9 B2 XWe look at the ripple effect that new housing prices have on re-sale property! R7 m6 B8 I" G" ?2 H' _$ F
values and can extrapolate what direction re-sale prices will be moving and by
# t: q( Z) i1 ^how much.
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; H: \7 [8 Z- ]. o4 Z- x& I9 b& R6 {For instance, for the last three years, we have told investors to avoid Windsor,
1 ~) p8 o9 g( ^4 K; E* |( V \Ontario as an investment area because the underlying fundamentals are not very r) Q; e5 q/ i( h0 O, r
strong. This has been proven once again with the release of the latest
+ z4 m4 f0 V Qfindings. New Housing Prices have actually decreased by .5% during June 2005 -" C3 `, z2 ^' x( e0 G+ e6 d3 p, t
June 2006 proving that fundamental investing works in helping you pick the best
7 `* M3 S9 |9 J5 {markets and avoid the flat ones. This .5% decrease should have little impact! f0 e% C B0 @, j
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) q1 Q4 h$ c# ^+ @4 M4 `, _3 Y: ^: x
market continues to be super heated. With close to 3,000 net new people into, q2 b. V; ^2 x3 h0 ^! Y) u* H' U% v
the city every month, the property market just can't keep up. That is why we
7 v, H# Q, C ^' V! G. Z8 k5 }saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
! b: o! h, P1 uThis is great news for the future of re-sale values in the city as these
+ y1 F0 v$ S3 j$ U9 hincreases will continue to ripple out into the market for at least the next six/ G, V1 g3 v P' G
months.
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. I2 u& m N7 T$ j7 b0 g d4 QComparing these two regions is a great illustration of the value of not getting
o; T; P4 b8 G7 P5 `; mcaught in the 'emotional guessing game' by just focusing on the underlying& a# R! M3 q* x; T6 a- O
fundamentals. It is sad to see those people who said in the last 2 years that
1 O1 {! z3 {) ~! H! V; fthe Alberta real estate market was over and they were going to sit back and wait
1 y, D Z* o7 s3 U3 n! j- b3 funtil it drops. Quite obviously, they have missed out on AMAZING gains, all$ a" T/ x0 M. R( 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
) t6 B Z* H7 e) w- D C2005 to June 2006), also great news.$ E+ c2 V1 f+ T9 y! U: \/ N
% G! g0 p& ]) lBy comparison across the country, these are the numbers for June 2005 - June
2 a1 j; ~( @3 A" r0 g# b2006 New Housing Price Index for:- o+ c5 R1 x1 W g: v
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Vancouver . . . . . . . . +5.2%
. W5 Y$ q7 C2 D7 i% qSaskatoon . . . . . . . . +8.5%2 u, f- l' D( ^9 x# N% Z
London . . . . . . . . . . . +3.0%: A5 q& @. I8 c
Hamilton . . . . . . . . . . +4.9%
# j# i. x6 [4 {8 d6 d) k( eSt. Catharines - Niagara . . . . +4.9%
3 O/ Q: h1 ?2 W3 r4 O: BToronto and Oshawa . . . . . . . +3.2
% n! t3 s5 p0 W( U8 z1 c# w6 EOttawa - Gatineau . . . . . . . . . +3.1%
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Fundamental investing ALWAYS makes you look like a genius - emotional investing
0 L2 F' X, @( R: _) ggives you quick highs, but also quick lows. Well done on your focus!$ m+ E$ {6 P+ y0 {0 y/ N# r
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As the fundamentals have been showing all along, the Alberta market continues to1 f5 A. P/ ^- k" f7 e
be strong, as in-migration and job creation continues to attract people from not
- P8 g) R% u) E+ }: [# Ponly across Canada, but from around the world. Our average wages are5 h, o/ p1 j$ n+ b- M3 F7 @) F
increasing, our population is increasing, our unemployment rate continues to2 B& U r' ]9 O$ e$ E/ o
drop and our GDP growth is slated to once again lead the country.7 T9 Z# P! ^' k' e+ \/ Y
, g9 u$ G! t! C0 x& b# IHere are some very interesting facts that are helping to support the strong( t$ j& `0 ?; F/ F2 j6 z: V
fundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in
7 D" r' ]% B+ T' GCanada, with Alberta once again leading the way. In fact, the projected growth* J" @- j/ S! d3 M1 \' m
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
1 u1 ~2 B# y7 j( z) uthis is slated to occur even with the labour shortages we are witnessing.
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( J: M. z0 D) S, n7 E2. People are discovering Canada as an investment center from all over the5 V! h2 D9 ?# g- z% o, a1 l
world. Recently, there have been investors coming here from Asia, Australia,4 P& f/ A! E( r0 K1 u3 c
the US, UK and Europe. In fact, if you review the world's press you will see
& ^( W! ~7 i4 o' X( Ythat Canada (with a focus on Alberta) is being discussed more frequently.
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0 K: h2 V/ i% \9 P# Q3. Don Campbell has just returned from presenting our Canadian investment
# H; M/ E; c5 K/ ratmosphere (including Why Alberta - Why Now") to a group of major investors in$ _- Z" R% d6 K. O6 Y' q
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after- |. ?3 f1 ^7 ~. \* t0 ]; k7 s
Don presented the economic facts, many of these investors (who could invest
' g {3 B2 y3 k; @anywhere in the world) have already booked their flights to here. Once again' B5 v" Q7 v/ @8 Z
proving that when the true numbers of our economy are presented (along with the/ c% U& D+ y! N
political stability of our country), there is no place in the world that can
& v, k: U" ?. K4 T' \beat it for long term investment.& W4 y; J, Q: l. H5 _0 F% W
) |4 G0 Y9 V+ _% h; Y4. Job creation continues to be strong (with a small lull in June); definitely0 |. N9 b' {8 U; x0 z) p
a sign of strong long-term fundamentals. RBC has also been following the job
6 i6 M, p& f2 R# K* g$ vcreation situation and here is what they are saying: (www.rbc.com/economics) t$ O$ }, H8 k0 t1 t, ~
"After generating a substantial 96,700 jobs in May, the largest such gain since
# \7 H8 h1 r7 J+ zJanuary 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
; b3 L( u* k9 afirst half of 2006, a feat not matched since the second half of 2002. With the/ k) U$ i; d4 }3 q' v
economy widely expected to grow at a more moderate pace in the second half of
! D( X' _5 ^# |- w0 O9 I! e/ othe year on the back of slowing trade activity, this impressive showing may not
1 J5 d! i. Q+ ?& O# K* }9 _repeat itself. We expect that employment grew in July at a pace consistent with
# I2 }+ `# ^% G. V- T4 ?its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
" ?6 y4 N2 I8 j Rits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate, W! q4 X! R1 g% Z0 C
of 6.1%." Overall very good news. Now the key is to ensure that the region in5 |* v0 Y- i: Y" O
which you are investing is continuing to generate jobs and increasing incomes.+ x5 u N# C! d! y3 g
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& P. y. {* v5 |/ C! v1 q, kIn other words, it is a great time to be taking advantage of this strong
) g4 F: [5 r( o( }6 p& Reconomy, avoiding 'excuses' and to especially not listen to the uninformed& a- w7 k* I) Q8 l& o
'dream stealers.' As long as you stick with your game plan, you continue to do+ l# ~: x5 T" U: L
your due diligence, and you remove emotions from the equation, you will see the
1 u# G/ _% L ~) eopportunities that are right in front of you, right here in Alberta. Let the
- X5 z/ N+ x* y( ^' a'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
4 m+ }3 |" Y( {* `* u# Eand your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison./ D: }& A/ _+ X: R' H! V3 a
$ [6 g' q' g. H0 j6 D, \) p" ^KPMG has recently released a comparison of the true Top Federal and Provincial
! G4 |" j' h2 d; VMarginal Capital Gains Tax Rates per province. It is very interesting to see
+ g2 }$ o! g- h( I; Ghow these will affect your exit strategy. Here are the numbers:; q+ R5 Y4 }* r' C1 p( S# T: m
4 Q/ x/ O+ {& o& X: ]4 y1 QBC . . . . . . . . 21.9%
5 z) F, O; @4 E1 r, _. W2 [7 fAB . . . . . . . . 19.5%2 e9 L% H4 l* l7 Y+ k c" Z% i6 M$ ]
SK . . . . . . . . 22.0%) Q, w& L. v# Q
MB . . . . . . . . 23.2%
2 g5 E J; D& EON . . . . . . . . 23.2%/ l) R" e* E9 h! {0 |
QC . . . . . . . . 24.1%+ L! _" x6 X# O5 \! y) [& q/ d
NB . . . . . . . . 23.4%, `7 k4 u3 l" }1 @# U+ L% e- w
NS . . . . . . . . 24.1%
* d2 h* c& E& jPE . . . . . . . . 23.7%; |2 i: z) M0 x- h' y
NF . . . . . . . . 24.3%
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- o0 L+ H) w+ K' Z/ U" n- ]1 PLower capital gains tax increases investment and stimulates the long term
. ?9 f+ l- Y: k+ [6 xeconomy of the province. It also allows real estate investors to keep more of6 O; q; v1 U8 T r% C2 |
their profits at exit time. Always a good number to pay attention to.0 ^/ T- l( [% K9 c4 D% Z
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L. J. Y& @; Z, o( S6 d4 f7 YOverall, by staying focused for the next short period of time, you have the+ P W# s5 |8 A4 }
opportunity to create financial freedom of which others can only dream. Of
+ I f6 S. T( O/ H* G1 N1 icourse, the key word is focus. And with an August line-up of 'Members Only'" j9 C# \! E' f! R i4 o' z4 S
events like this, you can't help to become a real estate investment champion+ X k2 L W1 x5 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
! h9 ^" n" @3 Z) u1 Bresults in just a few short years. |
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发表于 2006-8-25 08:35
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