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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 very4 V6 ?0 l8 f8 {# v2 k- }
interesting insights, not only into where the market has moved, but where it
2 J" s" t$ G$ ?will be going.
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It proved, once again, the value of looking at fundamentals behind a market. |: C; Y' J0 a3 v) p
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The New Housing Price Index is compiled by Statistics Canada and is used by% s5 l% }* \# ]& m- n
sophisticated investors to see how much the market has moved, as well as an
) \& C1 R: b+ F5 v# m2 Iindicator of where re-sale home prices will be moving in the coming six months.
# \$ v) `4 F- R& m* P& ZWe look at the ripple effect that new housing prices have on re-sale property/ k; f/ J; q+ [! a
values and can extrapolate what direction re-sale prices will be moving and by9 V; t s! s% o: {6 U/ a6 m
how much.
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9 e$ x1 V7 b) T7 C# n3 ^For instance, for the last three years, we have told investors to avoid Windsor,6 V$ b% j6 i" c5 d+ i: Q
Ontario as an investment area because the underlying fundamentals are not very* l* P e% p5 s: T
strong. This has been proven once again with the release of the latest
/ Z5 r8 I* n5 {9 h/ O' @+ s* ^2 ]findings. New Housing Prices have actually decreased by .5% during June 2005 -
% p+ x* }) n4 hJune 2006 proving that fundamental investing works in helping you pick the best
+ a7 L8 @0 V' A4 emarkets and avoid the flat ones. This .5% decrease should have little impact7 o" Z0 C3 o2 ?* Z# X9 a4 m
on average re-sale values in the Windsor region.. X& d0 b6 W5 n0 C# }
6 H9 u# a- H$ W U. tTo contrast this, the fundamentals we discuss are so strong in Calgary that the' A! L! _1 q' Z" L1 C; i
market continues to be super heated. With close to 3,000 net new people into8 N# N# W* L! i8 V/ T+ q( J
the city every month, the property market just can't keep up. That is why we
% v$ [6 t" L9 {( _0 rsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). 6 \: \+ ~6 t! B# J& H+ r* V- E+ u
This is great news for the future of re-sale values in the city as these
% q+ Z: A( \, x) \increases will continue to ripple out into the market for at least the next six
b3 U) V/ c t. Zmonths. 2 {/ \: g- b! F/ q3 {
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Comparing these two regions is a great illustration of the value of not getting
* E! n: r! A) G! ~; ^1 Ecaught in the 'emotional guessing game' by just focusing on the underlying, q2 C/ m9 L$ i$ \4 Y# z. W
fundamentals. It is sad to see those people who said in the last 2 years that
! J- F) Z+ ]/ C+ @- uthe Alberta real estate market was over and they were going to sit back and wait( `/ ~1 n4 I. r( D, A" M
until it drops. Quite obviously, they have missed out on AMAZING gains, all
6 S2 ]6 b- ?' ^because they didn't follow fundamentals, they just led with their emotions.
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$ L0 p# ^: J B( y# o" ^; XBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
4 N& x: A/ q) g# i" @2005 to June 2006), also great news.4 A( [3 P6 \6 a8 l) d# O7 H
: I; N/ f- Q% v. P9 `9 OBy comparison across the country, these are the numbers for June 2005 - June% h0 ^& X. m- |" Y
2006 New Housing Price Index for:
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6 f! H0 W0 [3 u5 d( u3 @Vancouver . . . . . . . . +5.2%# ~1 b& Z. ?; D
Saskatoon . . . . . . . . +8.5%1 O; G4 D! g+ v `* h8 L* L1 r) R
London . . . . . . . . . . . +3.0%
H# a- j% a/ g/ ~Hamilton . . . . . . . . . . +4.9%
! W! J% V$ @- Q1 BSt. Catharines - Niagara . . . . +4.9%
$ z4 ~8 i3 y6 n/ a' h3 N0 {% S% K+ LToronto and Oshawa . . . . . . . +3.2" k3 J% j/ t. G- D2 F" O9 M
Ottawa - Gatineau . . . . . . . . . +3.1%7 e. r) d' \& w' Y
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Fundamental investing ALWAYS makes you look like a genius - emotional investing$ ]( I. e7 D( P( 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& L) w6 ]4 y$ T
be strong, as in-migration and job creation continues to attract people from not2 B. ]6 _( l% Z Z
only across Canada, but from around the world. Our average wages are$ s9 W9 Q. G& j
increasing, our population is increasing, our unemployment rate continues to
$ n/ R3 |6 z( r" x4 [( Cdrop and our GDP growth is slated to once again lead the country.% f1 H- C' S/ j; u# G$ W# @
# ?8 s) f- D0 i4 y; h+ {Here are some very interesting facts that are helping to support the strong Q2 G% R) S* d$ {" [$ ^% B
fundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in
! X( F6 f6 t0 K! ?Canada, with Alberta once again leading the way. In fact, the projected growth
% _( I* h( w/ F# O9 w' A& efor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and; p' U/ g) b7 C# m5 F( y9 z! z6 L
this 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
# u1 g) r! V. o: Rworld. Recently, there have been investors coming here from Asia, Australia,& p0 O0 j% y4 U/ F% b
the US, UK and Europe. In fact, if you review the world's press you will see
% f9 ]6 x" U5 r2 f$ R2 w! bthat Canada (with a focus on Alberta) is being discussed more frequently.
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8 r/ ]* @; V7 q3. Don Campbell has just returned from presenting our Canadian investment
/ q' o8 [3 j! [( f& vatmosphere (including Why Alberta - Why Now") to a group of major investors in
j; }- _; _0 E# |: P( V/ F- kDublin, Ireland, and the response was overwhelmingly positive. In fact, after
+ J$ _# r* s! |# FDon presented the economic facts, many of these investors (who could invest4 b. k8 n& [7 G; E2 ~9 A7 B4 ?
anywhere in the world) have already booked their flights to here. Once again. m! w" T+ L( `9 f
proving that when the true numbers of our economy are presented (along with the
/ _: G# s5 d" Mpolitical stability of our country), there is no place in the world that can
7 [; U; G: b5 p' [# @( bbeat it for long term investment.
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( K; u! f( G- @2 h- J4. Job creation continues to be strong (with a small lull in June); definitely
7 d5 [8 m- b2 _a sign of strong long-term fundamentals. RBC has also been following the job
{* P/ v- K0 e, {creation situation and here is what they are saying: (www.rbc.com/economics)
/ L$ Y/ A) l& P: O- a"After generating a substantial 96,700 jobs in May, the largest such gain since
- e2 ?+ z4 r: tJanuary 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
% X; b8 n& |1 N! h3 z+ p: v) k9 sfirst half of 2006, a feat not matched since the second half of 2002. With the
" Y# y4 Q$ V& ~% M7 A( s" heconomy widely expected to grow at a more moderate pace in the second half of
' |$ F# F) _2 kthe year on the back of slowing trade activity, this impressive showing may not
& R% S& p/ a" P+ Orepeat itself. We expect that employment grew in July at a pace consistent with
$ B& J% F' g! cits recent trend of 24,000 jobs a month. Assuming that the labour force grew at4 G6 Z3 h, y% M! X7 E$ {6 |9 T
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate- p1 V' I+ _: r- t) K8 z
of 6.1%." Overall very good news. Now the key is to ensure that the region in j7 [) w5 Z$ [# h
which you are investing is continuing to generate jobs and increasing incomes.; B5 k- T! c& i6 v! f5 G
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In other words, it is a great time to be taking advantage of this strong2 s5 g: r; B" ]
economy, avoiding 'excuses' and to especially not listen to the uninformed
6 C; T) _0 |- ~) W- f- h4 I'dream stealers.' As long as you stick with your game plan, you continue to do
q1 }3 g* [& ]1 O3 |" m& V; H: k& R9 ~your due diligence, and you remove emotions from the equation, you will see the
5 L1 c3 |) y" v0 }opportunities that are right in front of you, right here in Alberta. Let the* j' z6 m! E5 b1 w, W$ T& h& y
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared, V: V c# Z/ D% m6 E( Z. O
and your financial freedom has surpassed even your wildest expectations.$ t0 ]5 Z N' [8 ~4 t4 I/ h
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Capital Gains Comparison.- Q7 K: J9 V. E0 h) d( @
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KPMG has recently released a comparison of the true Top Federal and Provincial
! i5 W0 I+ F6 P8 M2 Y/ o {' MMarginal Capital Gains Tax Rates per province. It is very interesting to see
, ^! D, O/ Y A! H- G) J9 Ehow these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%
5 m+ o# W1 r7 {) F4 KAB . . . . . . . . 19.5%! B# W: u. n9 O2 [
SK . . . . . . . . 22.0%
1 A/ Q4 p. z C9 B. @/ ?MB . . . . . . . . 23.2%7 ? M0 M8 S7 C2 R' C/ W
ON . . . . . . . . 23.2%7 d# R/ u! F* v, E% r2 ]1 i
QC . . . . . . . . 24.1%- R& ^8 I. q; E$ C) P
NB . . . . . . . . 23.4%
% U& A- Q9 ^9 Z. Y9 ]1 T5 |1 UNS . . . . . . . . 24.1%+ S' M3 J/ v4 G& ^ |
PE . . . . . . . . 23.7%7 t0 s @# f! ]# M5 T. m+ h+ P% ?
NF . . . . . . . . 24.3%2 P+ Z6 \' x, u. x7 o! s: Y* L, Z2 y
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Lower capital gains tax increases investment and stimulates the long term
) I q2 f6 \! Leconomy of the province. It also allows real estate investors to keep more of
, I0 P9 z8 @ W8 ttheir profits at exit time. Always a good number to pay attention to.
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( o2 k; v: y$ Y! [0 hOverall, by staying focused for the next short period of time, you have the7 d6 z+ W! J( I5 P! A7 U
opportunity to create financial freedom of which others can only dream. Of/ F" A% ? |5 N0 R, I( q2 t
course, the key word is focus. And with an August line-up of 'Members Only'
/ o. h4 }) j# N; b0 F) p! x# kevents like this, you can't help to become a real estate investment champion
% u/ ]5 N' K- }/ q9 lwhen you take action as a full REIN Member.- {. Z) t) ^& z" o t2 D! |
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the: ^' N: B* x) H O3 J
results in just a few short years. |
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发表于 2006-8-25 08:35
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