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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+ W9 S! h0 b* a' O7 D+ j
interesting insights, not only into where the market has moved, but where it
3 @" U6 L0 y0 \! {) Pwill be going.
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It proved, once again, the value of looking at fundamentals behind a market.- d/ A" O* q7 \6 c& C O; I" l0 r
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The New Housing Price Index is compiled by Statistics Canada and is used by
/ R; ?7 x+ T& q$ F8 K5 Y/ {sophisticated investors to see how much the market has moved, as well as an( o* R1 X0 O! Y$ o0 ~4 x& t9 i
indicator of where re-sale home prices will be moving in the coming six months.
. i5 \4 C% t5 F/ W& NWe look at the ripple effect that new housing prices have on re-sale property
! @, T% N$ C U$ M, Wvalues and can extrapolate what direction re-sale prices will be moving and by8 q8 _$ c, m$ R, p6 S' Q- `5 e
how much." C2 X' y1 g+ M% o* ?4 K. J
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For instance, for the last three years, we have told investors to avoid Windsor,
5 P* D4 X( G, W% ]1 S+ b( oOntario as an investment area because the underlying fundamentals are not very
4 |+ k- I6 X: l! C/ a( ^2 ~strong. This has been proven once again with the release of the latest
$ e7 `' B3 K u9 R5 ]4 X8 u* M/ qfindings. New Housing Prices have actually decreased by .5% during June 2005 -
. C1 r' x: j M1 d4 jJune 2006 proving that fundamental investing works in helping you pick the best8 k, p3 r! a' k( `
markets and avoid the flat ones. This .5% decrease should have little impact
! U3 P& ~6 S' r. D1 aon average re-sale values in the Windsor region.# X. b) X5 u) F5 Z& r" v
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To contrast this, the fundamentals we discuss are so strong in Calgary that the( O6 O- R( @( @2 ^8 M
market continues to be super heated. With close to 3,000 net new people into
/ {. ^6 U: X0 A; M4 O% zthe city every month, the property market just can't keep up. That is why we* B9 |( i ^: |$ m2 y9 D7 q6 t
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
& X$ W- k7 L5 e7 H8 hThis is great news for the future of re-sale values in the city as these
& d6 q) ]& C- ?0 a, O; nincreases will continue to ripple out into the market for at least the next six
# K: z5 g% e2 s0 f5 _months.
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& \ ^1 A. g6 C0 EComparing these two regions is a great illustration of the value of not getting$ k$ {& E/ D5 Q4 s) ^. f
caught in the 'emotional guessing game' by just focusing on the underlying' g! J4 Z7 B# e$ F( n. B! V
fundamentals. It is sad to see those people who said in the last 2 years that% k t- T3 l9 ]" h2 c
the Alberta real estate market was over and they were going to sit back and wait
4 b3 M; x& x# O* W0 P% m- O* `* Nuntil it drops. Quite obviously, they have missed out on AMAZING gains, all
U/ |) f+ X9 i$ f5 pbecause 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
% D8 [7 ^3 z0 U4 ~/ k2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June5 F9 S& [9 M" V. R
2006 New Housing Price Index for:- Q( e3 m% W9 }8 ~! R# ]6 w
: S+ s) ^( B3 ~9 \Vancouver . . . . . . . . +5.2%
, m8 P: J& h! _; QSaskatoon . . . . . . . . +8.5%8 l% O2 M# Z$ {/ R) n2 Y/ Q
London . . . . . . . . . . . +3.0%9 J; E# z; E$ \3 G d
Hamilton . . . . . . . . . . +4.9%) c' Q9 O2 E$ c" g8 A2 B6 E) i
St. Catharines - Niagara . . . . +4.9%
( W: J9 z" t$ v4 }Toronto and Oshawa . . . . . . . +3.2! z1 Z( P8 n6 Y* {8 m- l% ?8 O6 N& q
Ottawa - Gatineau . . . . . . . . . +3.1%1 R7 D+ A% F, j; b3 j: c
4 S4 A2 L3 h2 H* u5 j0 {Fundamental investing ALWAYS makes you look like a genius - emotional investing
0 V/ [2 @ f+ p& C+ `" Bgives you quick highs, but also quick lows. Well done on your focus!' H6 Z% o1 K# i5 e4 A4 @
0 F0 w) v! h1 r8 jAs the fundamentals have been showing all along, the Alberta market continues to6 ]" r( T* W9 S
be strong, as in-migration and job creation continues to attract people from not" _; M0 z" _$ ~$ f& U5 h4 i9 o+ \
only across Canada, but from around the world. Our average wages are
2 l! b. \/ s; I% S" Q' `increasing, our population is increasing, our unemployment rate continues to: j1 [$ p1 R$ z- U" S
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 strong1 n2 F e% X9 ]' A
fundamentals:
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7 N) L1 m# M; D$ T4 n1. The Conference Board of Canada is forecasting strong economic growth in7 D7 W. j+ |+ v+ Z! Y: z0 |
Canada, with Alberta once again leading the way. In fact, the projected growth* x5 G, V2 b$ n# F5 M2 S
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and' f" M! q0 w* M8 u9 I2 I, y
this is slated to occur even with the labour shortages we are witnessing.
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! J2 R- j& p4 m4 v. T2. People are discovering Canada as an investment center from all over the8 m. D( r! O7 a6 q7 W$ V n. ?1 U
world. Recently, there have been investors coming here from Asia, Australia,: W9 M8 F0 o4 V# G% e& X9 Z+ a6 e4 t1 W
the US, UK and Europe. In fact, if you review the world's press you will see
|; i; r& W! A tthat Canada (with a focus on Alberta) is being discussed more frequently. ' V/ X- T; E, D' Z5 j: X- L
z7 e. u1 \; w- j! A( r3. Don Campbell has just returned from presenting our Canadian investment
: }* I4 h' s% @6 k+ y6 s8 hatmosphere (including Why Alberta - Why Now") to a group of major investors in
) ^: Y1 M& h4 h( u; e. jDublin, Ireland, and the response was overwhelmingly positive. In fact, after& t+ p1 r7 X$ ~& b- F: ?7 ]
Don presented the economic facts, many of these investors (who could invest
! k) z5 z* @7 n( c7 ~anywhere in the world) have already booked their flights to here. Once again# f, [* s) o/ T6 j4 j* N% u# ~' _% D
proving that when the true numbers of our economy are presented (along with the
" `& X/ ]" O8 N% [political stability of our country), there is no place in the world that can
* q, Z/ N. w1 E8 ] r$ k( P3 `$ e/ qbeat it for long term investment.$ ~4 x5 W( D& L, F- O% M& t A
9 a; y- ?( ~' ]6 p4. Job creation continues to be strong (with a small lull in June); definitely
% I* ^( h0 I9 {% Ea sign of strong long-term fundamentals. RBC has also been following the job% Y- ]' T; A$ P- }% w$ z3 F; \. S7 W
creation situation and here is what they are saying: (www.rbc.com/economics), a; U1 e9 P$ I. O
"After generating a substantial 96,700 jobs in May, the largest such gain since/ n' F1 i) I. J3 ] W
January 2002, the economy lost a modest 4,600 jobs in June... 4 d2 b! S$ m; x" v: U+ V7 s
. W) j. J, V( k8 ^; P' T1 A' @Strength in the Canadian economy contributed to a gain of 215,600 jobs in the$ B( b4 W, }4 r3 f* S& Z
first half of 2006, a feat not matched since the second half of 2002. With the
3 H: k' u5 S; y& J5 F5 t9 geconomy widely expected to grow at a more moderate pace in the second half of d; Y6 u w% _$ L: L0 `
the year on the back of slowing trade activity, this impressive showing may not
! u; i4 X* q' d2 v5 \5 \+ V$ krepeat itself. We expect that employment grew in July at a pace consistent with
- Y% t7 j) V5 _7 sits recent trend of 24,000 jobs a month. Assuming that the labour force grew at
3 y4 E7 O( q: \its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate" F0 o. C1 G8 {
of 6.1%." Overall very good news. Now the key is to ensure that the region in
3 K, C8 D2 T5 d! ~7 Qwhich you are investing is continuing to generate jobs and increasing incomes.
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( Z' G. X: I) H( F8 UIn other words, it is a great time to be taking advantage of this strong
" @+ Z' v- R8 O/ r# D0 @! c+ aeconomy, avoiding 'excuses' and to especially not listen to the uninformed2 [9 k6 } f' f" G( b
'dream stealers.' As long as you stick with your game plan, you continue to do
0 R" Z" f) D* A# N( nyour due diligence, and you remove emotions from the equation, you will see the% ~, [' y8 n2 B1 @& e
opportunities that are right in front of you, right here in Alberta. Let the5 U$ w* o1 ?" D: |" [$ V3 m! W+ j- {+ y
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
. C! j# K* v; iand your financial freedom has surpassed even your wildest expectations.
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" F f- E) k+ p. t- L9 l: |Capital Gains Comparison.
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KPMG has recently released a comparison of the true Top Federal and Provincial
5 p0 L3 l( S7 I) h SMarginal Capital Gains Tax Rates per province. It is very interesting to see
2 ^/ S8 s- n: U( }# ]/ \how these will affect your exit strategy. Here are the numbers: S% |5 ]6 N) ^8 l1 P/ W
; @( B+ D: E( y" A& i# e3 o4 E9 OBC . . . . . . . . 21.9%
! S3 ~7 ?) U% `+ PAB . . . . . . . . 19.5%; e F- s7 h- r$ N
SK . . . . . . . . 22.0%
" J$ t( L+ p ?5 \MB . . . . . . . . 23.2%
# Q. V4 @% z6 d5 a6 j0 ^& lON . . . . . . . . 23.2%# ^6 N H2 G/ c& k: ^* l
QC . . . . . . . . 24.1%
+ R. S. q1 u1 U! D: N* B' h# _NB . . . . . . . . 23.4%0 W& W; _& ^; ~& H C
NS . . . . . . . . 24.1%
1 P* |/ y. a* @2 NPE . . . . . . . . 23.7%- Q9 D# N6 ^0 @1 R$ n. g' r4 Z
NF . . . . . . . . 24.3%
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Lower capital gains tax increases investment and stimulates the long term
% y& N. c |2 R! C. geconomy of the province. It also allows real estate investors to keep more of5 x$ S1 I- u) w, j9 a0 r5 F
their profits at exit time. Always a good number to pay attention to.
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% j' {6 J/ ~1 G+ R9 o9 IOverall, by staying focused for the next short period of time, you have the
! W7 R$ n3 m+ n! |opportunity to create financial freedom of which others can only dream. Of
7 f, }# g$ J. ccourse, the key word is focus. And with an August line-up of 'Members Only'& Y- y- [7 P/ d9 \$ H; ]
events like this, you can't help to become a real estate investment champion/ x* v/ F4 F) Z6 _* p$ v. d
when you take action as a full REIN Member.
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7 k( n7 s; i: D6 Y* a0 t" n- i) HFocus on the fundamentals, keep emotions out of your decisions, and enjoy the" h( @$ c0 `. J8 ~0 h
results in just a few short years. |
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发表于 2006-8-25 08:35
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