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NEW HOUSING PRICE INDEX...& X. @+ c) I3 I, N# G5 P
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The New Housing Price Index, has just been released and it provides some very- z: ?0 n' h" d: C; e9 C* T
interesting insights, not only into where the market has moved, but where it
% H; F# l( s3 V9 A) Q) e% ^0 s' dwill be going.% R. ?- C. ]- v" w& c0 M
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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 by2 ~2 ?& [1 F0 W( E6 k! ^
sophisticated investors to see how much the market has moved, as well as an! j* j5 J! B! ]5 T- t8 T
indicator of where re-sale home prices will be moving in the coming six months.
, f! K4 K" m7 i5 t; wWe look at the ripple effect that new housing prices have on re-sale property; y/ A% j" F: e8 |
values and can extrapolate what direction re-sale prices will be moving and by: A3 N+ ?* s0 f* W) O# t
how much.
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For instance, for the last three years, we have told investors to avoid Windsor,3 d \4 m2 [* i, y( o7 X# Y! J9 K
Ontario as an investment area because the underlying fundamentals are not very
* j' k! W3 } j5 wstrong. This has been proven once again with the release of the latest
- S4 J2 \ Q" Jfindings. New Housing Prices have actually decreased by .5% during June 2005 -9 ` l* j( v. _' \/ \* c: e, h
June 2006 proving that fundamental investing works in helping you pick the best
- _8 q2 Q, z$ g; e$ r& F6 ]markets and avoid the flat ones. This .5% decrease should have little impact
$ T$ u3 @# k5 p* }2 gon average re-sale values in the Windsor region.. x8 Y* V6 K& Q X1 b; D8 k; P
s' w/ z) a- zTo contrast this, the fundamentals we discuss are so strong in Calgary that the
* e3 g6 [4 N) q9 a2 Smarket continues to be super heated. With close to 3,000 net new people into
/ h0 S0 A* R. X; |: l- D3 Qthe city every month, the property market just can't keep up. That is why we8 |7 B Z/ f% e9 J5 m F5 A
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). 7 t* w2 q) K) H A; r4 l4 T6 e' N% l
This is great news for the future of re-sale values in the city as these7 D2 D8 p7 c, ^' D. v) ]! J: Y
increases will continue to ripple out into the market for at least the next six
8 Q: d* ^! Y, ^, t: ~5 J# C. umonths. m- u7 R; g$ ? L" D
( B! M: q- s& X$ WComparing these two regions is a great illustration of the value of not getting
9 K/ m2 ]: i. }3 q8 G' r" Pcaught in the 'emotional guessing game' by just focusing on the underlying
1 H9 P6 c8 ]6 w" n" Efundamentals. It is sad to see those people who said in the last 2 years that
: N% w, ~. M8 j! r8 |3 g; n, Bthe Alberta real estate market was over and they were going to sit back and wait0 L! J+ E' P, ?, }* S* S; s9 h
until it drops. Quite obviously, they have missed out on AMAZING gains, all
$ M8 V. Y" y$ v& N3 U' ~: z1 [8 Obecause they didn't follow fundamentals, they just led with their emotions.8 ] T4 [5 }8 C- r$ K3 q: z
[' e# v: e0 u) ?. o; _$ f+ W& yBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
% G4 V3 Q. w6 A \7 D2005 to June 2006), also great news.
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8 k8 y, s: d$ r' G" pBy comparison across the country, these are the numbers for June 2005 - June
# b( S) l( v1 b3 ^- Y2 g2006 New Housing Price Index for:) r1 e% b% i/ t: z) ` N, V+ F
9 [ I' W: K7 D1 bVancouver . . . . . . . . +5.2%
" y; k+ |& _- u v' @4 YSaskatoon . . . . . . . . +8.5%
8 Z8 m1 |: a4 A$ h; s" uLondon . . . . . . . . . . . +3.0%+ ?$ h0 c1 G. Z/ u
Hamilton . . . . . . . . . . +4.9%$ N, o' Z- u0 E( H
St. Catharines - Niagara . . . . +4.9%, i9 _/ R* r* ?0 I
Toronto and Oshawa . . . . . . . +3.2) `0 K, c# O3 v' i8 t8 h
Ottawa - Gatineau . . . . . . . . . +3.1%
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2 s9 i" Y5 M; w7 V; \Fundamental investing ALWAYS makes you look like a genius - emotional investing0 \" r/ D+ A8 i
gives 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
4 y( \- x/ @, X- \5 _+ Sbe strong, as in-migration and job creation continues to attract people from not
. [+ b; v8 l7 E! }: [% H0 ionly across Canada, but from around the world. Our average wages are4 p. P% b+ o. p8 v3 g$ H6 H) \
increasing, our population is increasing, our unemployment rate continues to7 j# ]$ G3 P, y
drop and our GDP growth is slated to once again lead the country.* Y' V/ g9 p) n
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Here are some very interesting facts that are helping to support the strong
, W( M# O) X9 D$ x& ~fundamentals:
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/ V! c4 G5 F4 m, O# {! Z1. The Conference Board of Canada is forecasting strong economic growth in
, |6 ]4 f8 W uCanada, with Alberta once again leading the way. In fact, the projected growth
! k8 m# E2 ^! wfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and7 K$ A! O7 r1 k& X% i) h
this is slated to occur even with the labour shortages we are witnessing.0 k, K8 p* M0 S0 \9 O
# }& E* {6 @3 h9 b- x7 n2. People are discovering Canada as an investment center from all over the
1 R8 O' @, W$ A+ P) pworld. Recently, there have been investors coming here from Asia, Australia,
6 E5 u9 g5 i4 othe US, UK and Europe. In fact, if you review the world's press you will see
' m1 T* d0 I3 P; R- ^& E' ythat Canada (with a focus on Alberta) is being discussed more frequently. * G1 r" K3 h: y: t& V# k+ f/ H
1 C! Q( c B4 z' H- G( Z/ Q$ \3. Don Campbell has just returned from presenting our Canadian investment
; s0 D& s* Z' M, f" z" patmosphere (including Why Alberta - Why Now") to a group of major investors in
9 N& h3 n' f$ V1 ]& M Q! ADublin, Ireland, and the response was overwhelmingly positive. In fact, after! t) b- o4 C V. D. R* X
Don presented the economic facts, many of these investors (who could invest
; X- P- a) R" W6 Yanywhere in the world) have already booked their flights to here. Once again# T- E% }. U2 K9 e1 ~) N) R8 C
proving that when the true numbers of our economy are presented (along with the8 n1 _5 `2 \/ o8 T' j% \
political stability of our country), there is no place in the world that can
1 Q* V+ m) I$ J! cbeat it for long term investment.: I9 ]' N$ }2 b: x0 y, M4 l
4 U; p8 R* @8 _( ^: x5 M4. Job creation continues to be strong (with a small lull in June); definitely
3 P$ }. p S" D2 _1 oa sign of strong long-term fundamentals. RBC has also been following the job
5 X' B8 [5 Z acreation situation and here is what they are saying: (www.rbc.com/economics)5 }! z% q4 Q8 U8 c6 j
"After generating a substantial 96,700 jobs in May, the largest such gain since
0 S4 d: c! Z/ ^6 D) _, [8 pJanuary 2002, the economy lost a modest 4,600 jobs in June...
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) _4 [8 h4 _, h- ^% q( zStrength in the Canadian economy contributed to a gain of 215,600 jobs in the
% f. y* ^- X8 l- S* Gfirst half of 2006, a feat not matched since the second half of 2002. With the N- l$ e1 H- @. m( U; W4 S8 J' n3 n
economy widely expected to grow at a more moderate pace in the second half of; n% V7 \$ J0 k5 B- r5 }, B
the year on the back of slowing trade activity, this impressive showing may not
X) f( D0 m3 D- F) j# orepeat itself. We expect that employment grew in July at a pace consistent with9 F) x0 P9 I ~, o2 U" A# h/ E
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at0 v' k( k4 e" ]9 y6 W% _( s
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
% B& _4 q% ]* D5 mof 6.1%." Overall very good news. Now the key is to ensure that the region in- ~5 Q: d/ ]' m6 Q9 S
which you are investing is continuing to generate jobs and increasing incomes., r: D( }9 j) [ `' r
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/ }% Z/ {9 S& ~ tIn other words, it is a great time to be taking advantage of this strong% N% W! c( A# @8 z; a) W
economy, avoiding 'excuses' and to especially not listen to the uninformed
T- t* J! P( n! ?7 B6 f' }* k'dream stealers.' As long as you stick with your game plan, you continue to do8 Y# P! U0 j* t0 Q, [$ E6 k
your due diligence, and you remove emotions from the equation, you will see the; u2 I3 `: t7 f7 r7 e% B9 U
opportunities that are right in front of you, right here in Alberta. Let the* v- I1 ?7 C0 ?& N. C
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
7 M" K I1 [2 s# `- Sand your financial freedom has surpassed even your wildest expectations.) C$ A0 X5 k% p. C: e
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& q5 Z" h3 J# pCapital Gains Comparison.
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. s. B+ e( ~5 {6 }: i }; J1 KKPMG has recently released a comparison of the true Top Federal and Provincial
$ J9 H' X& R; b X) L4 K* zMarginal Capital Gains Tax Rates per province. It is very interesting to see
5 u% y) Z. g6 l7 }$ m1 z/ W7 ghow these will affect your exit strategy. Here are the numbers:
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" J" [, i, k* O9 ^& }3 zBC . . . . . . . . 21.9%& c1 M1 e& d6 F) n1 N# T) @
AB . . . . . . . . 19.5%
; }5 s+ ?! [" N( L$ J1 qSK . . . . . . . . 22.0%
1 M' H7 n i+ mMB . . . . . . . . 23.2%! x# a, l& T' D- B2 l- B4 w
ON . . . . . . . . 23.2%
& x1 {+ C6 H6 {" E7 [QC . . . . . . . . 24.1%
0 c5 g4 T" t2 g# K! ^; }! f8 mNB . . . . . . . . 23.4%5 c* l# a% G; N% p
NS . . . . . . . . 24.1%' }% _$ n: ~$ D5 l* V8 k8 [
PE . . . . . . . . 23.7%
0 }( y6 e. X! h+ l$ cNF . . . . . . . . 24.3%4 y6 [* ?, @4 Q2 P M* q8 j: l5 ]
T) B. l$ B, d( vLower capital gains tax increases investment and stimulates the long term, z+ \$ j4 o! v1 n' f7 i
economy of the province. It also allows real estate investors to keep more of
+ _' M; z Q$ X8 a+ t, G) w; q# {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 the1 ?" Z4 |8 ? L2 u
opportunity to create financial freedom of which others can only dream. Of
$ A9 I6 H0 W; Q3 ?+ S9 X5 Tcourse, the key word is focus. And with an August line-up of 'Members Only'
a& u0 u1 t( r! E& gevents like this, you can't help to become a real estate investment champion
% \. ?! P. |; [$ `( {9 jwhen you take action as a full REIN Member.$ u* F) H$ k0 D3 `
: U' B( M: O8 CFocus on the fundamentals, keep emotions out of your decisions, and enjoy the& ^, y, }# r% B3 X
results in just a few short years. |
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发表于 2006-8-25 08:35
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