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NEW HOUSING PRICE INDEX...6 d T1 x, ?0 p3 |/ s( O
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The New Housing Price Index, has just been released and it provides some very1 L, ?4 ?7 a4 h3 _+ }0 b
interesting insights, not only into where the market has moved, but where it, ^: f* j# w$ P1 U' q5 {7 K
will be going.# ?5 P# J+ ~5 j8 m
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It proved, once again, the value of looking at fundamentals behind a market.+ l- g" \% g- `; @6 d* s' S- c
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The New Housing Price Index is compiled by Statistics Canada and is used by2 ^/ B$ U! ~- c$ t' \0 f- t F
sophisticated investors to see how much the market has moved, as well as an A9 J9 U0 e1 v5 q) e3 e2 h. @
indicator of where re-sale home prices will be moving in the coming six months.
/ p" L- i! u3 H: B6 {) dWe look at the ripple effect that new housing prices have on re-sale property
" g# C: F: F b# q1 \values and can extrapolate what direction re-sale prices will be moving and by( x* Y- C2 f) ]( c: B
how much.
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For instance, for the last three years, we have told investors to avoid Windsor,
1 X/ C) Y" |' F# Z4 ^' x8 \Ontario as an investment area because the underlying fundamentals are not very2 x; |/ V- [9 V; G2 ^9 v
strong. This has been proven once again with the release of the latest' N: x6 Q1 I& X1 _" P5 r, P$ A
findings. New Housing Prices have actually decreased by .5% during June 2005 - { `; }, U4 n3 r3 D
June 2006 proving that fundamental investing works in helping you pick the best
) w N+ W/ z! L+ _ l) @markets and avoid the flat ones. This .5% decrease should have little impact
( ^4 Y, J- U# P1 \on average re-sale values in the Windsor region.' q: z2 G0 M \: o
& y: u; N! Y) x) i( G7 HTo contrast this, the fundamentals we discuss are so strong in Calgary that the
$ J5 I" T) B0 i- N( Pmarket continues to be super heated. With close to 3,000 net new people into
, ^* ^8 T, ^! ythe city every month, the property market just can't keep up. That is why we, j5 I, g8 X5 w
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
2 j: l, e' l$ K6 o& |# x5 V$ ]. G" m aThis is great news for the future of re-sale values in the city as these4 q( o# d1 e0 F! Z, X c) g/ g& T* g, F
increases will continue to ripple out into the market for at least the next six) J c( {, c" {. G/ ?) u& ?
months.
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Comparing these two regions is a great illustration of the value of not getting
% k6 q$ N t* e3 @; o! x' y! Hcaught in the 'emotional guessing game' by just focusing on the underlying8 E8 T! D8 X* }" g& Q
fundamentals. It is sad to see those people who said in the last 2 years that
+ Z2 q- i$ L: J- i- }; G0 G- tthe Alberta real estate market was over and they were going to sit back and wait3 j5 h* |6 j l( s, J, k
until it drops. Quite obviously, they have missed out on AMAZING gains, all$ [2 e, X9 F; t6 p5 X
because they didn't follow fundamentals, they just led with their emotions.
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7 ~4 r. F7 n: t2 X& WBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
- Q- z+ B9 Z: ^5 Y1 ~- Z+ ~* Q2005 to June 2006), also great news.! W( x9 k4 h9 @
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By comparison across the country, these are the numbers for June 2005 - June
7 { b$ K+ S. R; t2006 New Housing Price Index for:
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Vancouver . . . . . . . . +5.2%
) S9 E7 `9 _( w# m; b7 a. _& WSaskatoon . . . . . . . . +8.5%9 r% O9 W& Z9 i6 O2 _* U& I; H
London . . . . . . . . . . . +3.0%% x/ {( I/ y3 s2 O
Hamilton . . . . . . . . . . +4.9%
- j" s4 V/ d0 ^8 I H* k% ZSt. Catharines - Niagara . . . . +4.9%
! f4 {" I6 H. n( c# v8 uToronto and Oshawa . . . . . . . +3.2/ U- P6 _" t0 K" i) z: p8 u2 Q- D8 W
Ottawa - Gatineau . . . . . . . . . +3.1%% E0 {7 h( A) ?1 L+ g, x0 S
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Fundamental investing ALWAYS makes you look like a genius - emotional investing# Z$ _- R. }( x* ` l$ i
gives you quick highs, but also quick lows. Well done on your focus!. A0 Z* L, Q4 R7 c3 B# G
0 j. W' D2 R0 A" m1 L/ y/ UAs the fundamentals have been showing all along, the Alberta market continues to7 y; `6 b" b7 e0 _5 [$ u
be strong, as in-migration and job creation continues to attract people from not
8 V" C7 A" c7 X/ C7 M conly across Canada, but from around the world. Our average wages are
2 x b, k0 G: rincreasing, our population is increasing, our unemployment rate continues to6 Q5 ~0 U! Q& a8 i1 R6 w8 B
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 strong
7 Q1 K" M9 f+ Q% Efundamentals:
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$ I" m# j7 ?. t1. The Conference Board of Canada is forecasting strong economic growth in
, v5 M4 U3 p) q* f c+ G1 l) ^7 wCanada, with Alberta once again leading the way. In fact, the projected growth+ L4 W7 ?+ @ c; r8 M
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
. I/ P" n; A6 |3 j3 J$ L a9 W& `! Ithis is slated to occur even with the labour shortages we are witnessing.
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2. People are discovering Canada as an investment center from all over the' o4 Z, i2 r, S$ g- D6 j
world. Recently, there have been investors coming here from Asia, Australia,
' N! ~, h5 _) Q' T: s* E1 y" X0 X% zthe US, UK and Europe. In fact, if you review the world's press you will see3 g& M5 {2 U0 C& K) Q0 _7 b
that Canada (with a focus on Alberta) is being discussed more frequently. ! H2 i2 c: }) s2 _- j' q
9 d! b1 b1 K: W0 ^2 W3. Don Campbell has just returned from presenting our Canadian investment! K$ B% U( _8 c, D u! P
atmosphere (including Why Alberta - Why Now") to a group of major investors in, d$ b/ S5 {, U/ M9 }4 g
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after8 S7 c8 i- Z2 ~. j2 N0 L+ f( r
Don presented the economic facts, many of these investors (who could invest0 A' q* ^/ F/ X& E( T
anywhere in the world) have already booked their flights to here. Once again/ m2 _# R) R' S7 \& J! {6 _. h
proving that when the true numbers of our economy are presented (along with the7 h. V! |8 @7 a
political stability of our country), there is no place in the world that can
( e" z9 P& `8 z; l# F# Lbeat it for long term investment.' y$ I P0 @3 n
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4. Job creation continues to be strong (with a small lull in June); definitely, [& h+ U) A! r8 j& t l
a sign of strong long-term fundamentals. RBC has also been following the job) M5 K, }$ ~) T: L
creation situation and here is what they are saying: (www.rbc.com/economics)
9 `! W, c% f5 N% o"After generating a substantial 96,700 jobs in May, the largest such gain since
4 l @; i- U; E# k. y/ fJanuary 2002, the economy lost a modest 4,600 jobs in June... / x2 C, ?; N' V" l3 T
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the
/ L; I+ W1 h: E( Bfirst half of 2006, a feat not matched since the second half of 2002. With the/ R( v" J" X8 j. i. R
economy widely expected to grow at a more moderate pace in the second half of- A7 [6 n+ d; k) K& }
the year on the back of slowing trade activity, this impressive showing may not
3 o/ U+ S2 i0 h& W: [repeat itself. We expect that employment grew in July at a pace consistent with# c2 M/ {7 I7 n+ U; u
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
+ ]2 T- p- x' O `its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
+ P, y+ d! m; c: p7 lof 6.1%." Overall very good news. Now the key is to ensure that the region in
4 X$ j5 t; m7 U! ^: I% g9 \9 rwhich you are investing is continuing to generate jobs and increasing incomes.% m& ~1 v) Q) E) c( Z3 c. o
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- |7 s7 L2 K# u0 f- D( y$ kIn other words, it is a great time to be taking advantage of this strong
& P. ?3 O2 ^9 d5 l$ A- Seconomy, avoiding 'excuses' and to especially not listen to the uninformed0 b$ J9 @) x# A3 U. i
'dream stealers.' As long as you stick with your game plan, you continue to do
, ?* {; H3 E q$ u7 p" D. [your due diligence, and you remove emotions from the equation, you will see the
K3 L, Z0 r3 U! F: i0 ^! d3 K& Uopportunities that are right in front of you, right here in Alberta. Let the* ]9 d# q& A( L5 U3 U# A
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared; }2 k( t2 p+ M, X# S+ W4 r# C
and your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison.8 W, |; Y. O* E" i; O
# ?0 h5 B& `) Q+ Q' V( G" e/ wKPMG has recently released a comparison of the true Top Federal and Provincial+ w6 Y/ N/ A) c3 L; W. `- F" l
Marginal Capital Gains Tax Rates per province. It is very interesting to see
- A) U. p$ a, p0 U1 X0 j& Hhow these will affect your exit strategy. Here are the numbers:7 |, B b* @; Z
" x; D% d9 x0 h$ V; w4 `# X5 hBC . . . . . . . . 21.9%
. g& y" a/ g9 V7 s. VAB . . . . . . . . 19.5%
0 q& K1 o D/ v6 M$ |SK . . . . . . . . 22.0%
3 T5 O8 d: f5 T% J7 e. M% o$ H" {MB . . . . . . . . 23.2%* h- _/ Y+ s9 a7 M e
ON . . . . . . . . 23.2%
" y" y6 t$ F5 N+ Q" I0 TQC . . . . . . . . 24.1%
$ }! u( f+ u5 l4 ^9 P- `' lNB . . . . . . . . 23.4%9 g( D$ L3 h# k; d! I- r* h# H
NS . . . . . . . . 24.1%9 J: e1 k4 F H: }$ E9 o7 Z& v- T
PE . . . . . . . . 23.7%" K! W3 a0 J* Z4 I
NF . . . . . . . . 24.3%6 P p7 ?' U# i7 v- U- ?
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Lower capital gains tax increases investment and stimulates the long term8 i, w! Q* w0 c g1 D% u
economy of the province. It also allows real estate investors to keep more of
/ X% E# O% G( g' X7 d7 `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 the
0 a' p$ t! O/ V( b& Yopportunity to create financial freedom of which others can only dream. Of1 \ J8 v7 N" n' x" Y
course, the key word is focus. And with an August line-up of 'Members Only'0 e4 V$ i; L, d* R: ~' L a
events like this, you can't help to become a real estate investment champion
. m' K2 {, j! N# n q% U9 _3 pwhen 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
2 C( p- K5 e* O/ A, U3 V) gresults in just a few short years. |
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发表于 2006-8-25 08:35
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