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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
: [( u; y: f4 x" @interesting insights, not only into where the market has moved, but where it
6 w. {. U b$ n$ I" J9 ?# Vwill be going.2 p# b3 E1 m# m3 l& k/ V' E0 w
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It proved, once again, the value of looking at fundamentals behind a market.
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1 i6 Y5 @& o4 l' A6 k8 r6 c; PThe New Housing Price Index is compiled by Statistics Canada and is used by
5 F; e4 `( s2 Y, A2 h5 zsophisticated investors to see how much the market has moved, as well as an
+ E [6 g% B3 p& m5 R/ G" Eindicator of where re-sale home prices will be moving in the coming six months. ' `# M/ Y+ v: r$ Z% s! i0 C/ r# Z
We look at the ripple effect that new housing prices have on re-sale property! L3 g4 Y. w Q i+ o% s+ o! A4 r
values and can extrapolate what direction re-sale prices will be moving and by) y' M$ t1 Y. A% S5 `, V4 E* o% W
how much.
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For instance, for the last three years, we have told investors to avoid Windsor,
$ E: V8 Q9 o* L& Z) l- _' eOntario as an investment area because the underlying fundamentals are not very
6 [* `; L8 Z4 {% Y' M) c, U& ystrong. This has been proven once again with the release of the latest
/ E+ o$ a3 W* C6 K/ _findings. New Housing Prices have actually decreased by .5% during June 2005 -) `0 i! Z1 Z" g
June 2006 proving that fundamental investing works in helping you pick the best b% k: _3 G6 [4 q7 o
markets and avoid the flat ones. This .5% decrease should have little impact- v7 [; m+ E, \
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: |1 H$ _2 a* Z; C3 o, R
market continues to be super heated. With close to 3,000 net new people into4 O, K+ j5 H$ ^3 b
the city every month, the property market just can't keep up. That is why we
& d/ P$ x' R3 @saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
* _" q$ D3 b' g# x3 N( h! YThis is great news for the future of re-sale values in the city as these9 z {- t) L. Z5 F0 O# I
increases will continue to ripple out into the market for at least the next six
. _3 g6 l* D Q) S: [2 [5 kmonths.
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Comparing these two regions is a great illustration of the value of not getting6 M- D& @. x0 \" I9 {9 U' J
caught in the 'emotional guessing game' by just focusing on the underlying* r: X( _7 a6 A. j$ L
fundamentals. It is sad to see those people who said in the last 2 years that
- j5 \7 }$ N% j# R, c9 Fthe Alberta real estate market was over and they were going to sit back and wait
% \) T: e' N# a: V3 o B! euntil it drops. Quite obviously, they have missed out on AMAZING gains, all
* t* ?# ]/ e& ebecause 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
' g9 z- R M* r) O2005 to June 2006), also great news.
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5 E `- ?4 y. [3 NBy comparison across the country, these are the numbers for June 2005 - June# s Z8 D" d( b
2006 New Housing Price Index for:! G. P7 b3 G. c
+ O3 {* r' l1 N: q9 w1 Z* @' u# kVancouver . . . . . . . . +5.2%6 J% Y/ l* L! x! }5 V
Saskatoon . . . . . . . . +8.5%7 W3 e2 k3 \) v: `. _0 v
London . . . . . . . . . . . +3.0%
9 Q- `! X- ^( Q9 O$ p' Z" n# MHamilton . . . . . . . . . . +4.9%
* k/ z9 }/ X) y! P3 B( ^* L3 `St. Catharines - Niagara . . . . +4.9%8 b% o, r5 X' Z" J
Toronto and Oshawa . . . . . . . +3.2& l1 A) h7 ]. D% R: c# Q
Ottawa - Gatineau . . . . . . . . . +3.1%! P4 v4 }; u* e7 i
K+ D* S0 |$ o& q1 ~Fundamental investing ALWAYS makes you look like a genius - emotional investing7 N: N$ O, d" q% A% g' V
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
& M6 X- m3 w0 g: Y) ~& Ebe strong, as in-migration and job creation continues to attract people from not
/ l( z# @: @1 {8 D$ t% Zonly across Canada, but from around the world. Our average wages are" _" T6 O: A$ ~6 J" R4 U( r
increasing, our population is increasing, our unemployment rate continues to
% x. X* I9 h" p: h) b, r2 jdrop and our GDP growth is slated to once again lead the country.4 l3 b6 i# V5 n- s1 o
! \6 r& ~# e/ i8 l% dHere are some very interesting facts that are helping to support the strong
: w; b$ F* }. N' V* lfundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in
6 _: n; ^, F& ?- Y. [Canada, with Alberta once again leading the way. In fact, the projected growth7 K/ t6 J, W7 F( P- R
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
- u4 i" }. } X( g* Ithis is slated to occur even with the labour shortages we are witnessing.( ~# y8 Q& Q0 D1 }1 _! w5 n3 C
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2. People are discovering Canada as an investment center from all over the
1 q' C5 \- b5 q7 C0 L R5 I7 `+ ?4 Gworld. Recently, there have been investors coming here from Asia, Australia,
- Y7 z9 I2 y0 _9 E) \# w# ?the US, UK and Europe. In fact, if you review the world's press you will see
4 @+ D& C$ w4 p- Y& B# V, M5 xthat Canada (with a focus on Alberta) is being discussed more frequently. ' q3 f% O5 H5 `
3 ?' ~$ ^& d6 c% i; w2 z5 u7 y3. Don Campbell has just returned from presenting our Canadian investment
t( n# i; e4 k) u3 A7 m0 aatmosphere (including Why Alberta - Why Now") to a group of major investors in4 ]# B# q6 c6 p/ [% r0 u% ^' }
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after4 {/ G9 N' R2 h# d1 v
Don presented the economic facts, many of these investors (who could invest
1 \- v3 z6 t* D- `. W( Danywhere in the world) have already booked their flights to here. Once again
' a7 v; Y3 W P: p. [) N( Uproving that when the true numbers of our economy are presented (along with the
) D) [% n" Y8 E$ U3 ~+ Ipolitical stability of our country), there is no place in the world that can
, T7 `- S0 d% X8 f3 _4 Bbeat it for long term investment.: h% V6 c4 C2 I. w
) q# D0 X( I7 s* z3 s5 g/ c4. Job creation continues to be strong (with a small lull in June); definitely
?5 ]0 r) j4 L& i# Da sign of strong long-term fundamentals. RBC has also been following the job
- ]5 O: N" C: ]. V$ {) k8 r3 screation situation and here is what they are saying: (www.rbc.com/economics)
4 T' J2 t7 A0 l3 c+ b4 n7 Z"After generating a substantial 96,700 jobs in May, the largest such gain since
2 D1 W$ T+ u: c( ^) [: A7 uJanuary 2002, the economy lost a modest 4,600 jobs in June... ) R0 X2 |( a7 V# n$ n# c
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the
3 E4 b3 d, h! x6 W: h0 I0 ^; x* R- Zfirst half of 2006, a feat not matched since the second half of 2002. With the& A+ A8 ^1 d4 \3 b
economy widely expected to grow at a more moderate pace in the second half of
* Q9 H$ V& M: z" a* R* b0 F8 ~0 f- nthe year on the back of slowing trade activity, this impressive showing may not% [ x% d( X; P H
repeat itself. We expect that employment grew in July at a pace consistent with! s4 @" ^9 D# u8 u
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at8 t+ E; a& {2 \) d7 L" j
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate# [# z8 p5 j4 H! }
of 6.1%." Overall very good news. Now the key is to ensure that the region in1 i0 Q M* c# k8 Y% B" M
which you are investing is continuing to generate jobs and increasing incomes.
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" h- s8 g; [* R# A8 _& ZIn other words, it is a great time to be taking advantage of this strong" c& [- c: i' ^* m& Y) n8 M
economy, avoiding 'excuses' and to especially not listen to the uninformed- }- Y% n' }8 o2 s6 N5 ~
'dream stealers.' As long as you stick with your game plan, you continue to do
7 {6 M6 j" v+ n9 Qyour due diligence, and you remove emotions from the equation, you will see the2 S. i& c1 ]- Q5 i3 g0 v2 X1 D7 X
opportunities that are right in front of you, right here in Alberta. Let the' e7 k- Z' _5 t$ r% a
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared9 v; D" o" |; I) ^1 O
and your financial freedom has surpassed even your wildest expectations.
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. w8 `+ L, ]2 V. ^3 OCapital Gains Comparison.
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KPMG has recently released a comparison of the true Top Federal and Provincial
6 B% @6 q5 W% O7 f- mMarginal Capital Gains Tax Rates per province. It is very interesting to see
w/ R7 I8 j& ]( K4 Ghow these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%
, e# u1 X, @9 dAB . . . . . . . . 19.5%
" Z0 I% i: E" N) XSK . . . . . . . . 22.0%: Z+ v M4 _* X1 F# O
MB . . . . . . . . 23.2%
8 q i* }% b' _: M# H6 SON . . . . . . . . 23.2%
! F. D6 p3 ]7 ^6 \QC . . . . . . . . 24.1%5 W6 x/ Y1 c' W
NB . . . . . . . . 23.4%
# |7 ^4 J$ O7 i/ T( M) LNS . . . . . . . . 24.1%
0 n8 e9 m0 a% K: I: f. Q, o, L" OPE . . . . . . . . 23.7%
0 a. t& @9 \& ?0 e( G2 O8 t, M# fNF . . . . . . . . 24.3%& {7 c f$ I) A. i9 ?' M
/ E0 [) _; q# F- k* ZLower capital gains tax increases investment and stimulates the long term! n. k6 K1 P4 \
economy of the province. It also allows real estate investors to keep more of/ r X9 j4 f) p" P6 G; i& ?8 i
their profits at exit time. Always a good number to pay attention to.
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+ _ W! i" z$ Q! R9 t- uOverall, by staying focused for the next short period of time, you have the( h4 W$ S! c7 g/ h. q
opportunity to create financial freedom of which others can only dream. Of1 v3 @4 H/ p: A: T) R
course, the key word is focus. And with an August line-up of 'Members Only'
8 ?/ ~+ D& Q+ n% I9 qevents like this, you can't help to become a real estate investment champion
' i. B4 v, u1 J" G: g: w p+ }$ k* jwhen 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; D( d( f8 h% b! D1 q4 O6 B
results in just a few short years. |
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发表于 2006-8-25 08:35
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