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NEW HOUSING PRICE INDEX...3 [6 I! f% u1 t' h) c( Q9 b
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9 x/ f6 Q4 \. ?2 o3 Z9 EThe New Housing Price Index, has just been released and it provides some very& t! D- ~& z7 g4 |5 R' m
interesting insights, not only into where the market has moved, but where it6 K' G% c) x" o1 o" c/ f
will be going.
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It proved, once again, the value of looking at fundamentals behind a market.1 w; f8 o& x, E
6 S8 p( x" w, R4 f) k1 qThe New Housing Price Index is compiled by Statistics Canada and is used by+ ?0 P& ^( {& w! M$ D9 l
sophisticated investors to see how much the market has moved, as well as an; g* O1 a* M9 a+ c& g
indicator of where re-sale home prices will be moving in the coming six months. 7 o I) |& j, M
We look at the ripple effect that new housing prices have on re-sale property
3 I/ _, x# l- B' hvalues and can extrapolate what direction re-sale prices will be moving and by2 c; P6 a# v7 c8 X, z( c8 B
how much.- f+ S5 d: g) B- I+ s2 }8 L! p# b
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For instance, for the last three years, we have told investors to avoid Windsor,8 ?8 ^% s a" H: Q* s: U
Ontario as an investment area because the underlying fundamentals are not very$ g" R% _8 G6 E0 H' ^
strong. This has been proven once again with the release of the latest
5 |: @& u. \/ r( r2 \5 O# Ofindings. New Housing Prices have actually decreased by .5% during June 2005 -
3 Q% k+ c$ ], _% r/ `* q" }June 2006 proving that fundamental investing works in helping you pick the best
# n- u$ \0 Y* ^markets and avoid the flat ones. This .5% decrease should have little impact
; E) m3 H1 O7 p& pon 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
4 }0 i4 m$ l" ~market continues to be super heated. With close to 3,000 net new people into
2 f# A. {7 H, n( Q6 a3 Othe city every month, the property market just can't keep up. That is why we
, U% F& B* g- ^: xsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). # L8 k+ t9 B5 Q7 r
This is great news for the future of re-sale values in the city as these
( m l: B6 v% G% e! i- sincreases will continue to ripple out into the market for at least the next six/ z* O, I, V9 S/ f! @0 R
months.
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u/ l4 X! j8 m) d( U; F# b4 [0 H9 f4 V' SComparing these two regions is a great illustration of the value of not getting: `4 {7 N9 |1 c* m4 Q6 a
caught in the 'emotional guessing game' by just focusing on the underlying2 o0 |4 {# g- j" Y9 \
fundamentals. It is sad to see those people who said in the last 2 years that
' X: e( e6 V- C1 Q3 V! n, j* J! k7 Xthe Alberta real estate market was over and they were going to sit back and wait
/ Q2 U$ B! y/ o0 \4 y- ountil it drops. Quite obviously, they have missed out on AMAZING gains, all
?; E$ ]" t6 s/ G7 dbecause 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
- z9 s0 _: `& q2005 to June 2006), also great news.9 f( d) o' d5 ~7 j1 n2 K
' f% m/ z. n6 v. f$ H( g( KBy comparison across the country, these are the numbers for June 2005 - June
2 L/ P! u& O+ W8 X- N2006 New Housing Price Index for:
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$ Q1 D4 J. Z5 r0 ^. b1 UVancouver . . . . . . . . +5.2%
# [. f6 @1 N5 c& aSaskatoon . . . . . . . . +8.5%
' f* K9 E2 m) ^! T8 s2 C; C/ J% tLondon . . . . . . . . . . . +3.0%" i+ t$ h, k0 g
Hamilton . . . . . . . . . . +4.9%
% u7 d! G9 f# ]8 D1 ]( `) ~% ySt. Catharines - Niagara . . . . +4.9%
5 w# H0 @1 A+ F1 W, XToronto and Oshawa . . . . . . . +3.2
5 }$ E4 P( A" g* @Ottawa - Gatineau . . . . . . . . . +3.1%; \5 B( ?! @. A0 p
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Fundamental investing ALWAYS makes you look like a genius - emotional investing! r) v% R8 r0 ~4 S/ O
gives you quick highs, but also quick lows. Well done on your focus!; F; d8 } U1 N3 P$ P2 }/ i* w
9 Q4 z' S; b" `2 j5 {As the fundamentals have been showing all along, the Alberta market continues to: x9 A6 L7 Y# x) b4 Q
be strong, as in-migration and job creation continues to attract people from not
/ F, f! N1 E) Q; |only across Canada, but from around the world. Our average wages are2 }7 K* k4 D# h. J0 n6 k9 t
increasing, our population is increasing, our unemployment rate continues to- q o; W4 p4 H4 w
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
0 K; q0 G' x5 W, Bfundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in
8 e9 i1 e1 c, }* vCanada, with Alberta once again leading the way. In fact, the projected growth) _) J; e4 b" U z8 m# g! U
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and! I0 B: \9 R1 Y- e3 q- M: t7 V
this is slated to occur even with the labour shortages we are witnessing.5 h6 X% G# ?2 `, i
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2. People are discovering Canada as an investment center from all over the" n$ [7 s4 X3 }8 f$ Q k* H2 u. ]
world. Recently, there have been investors coming here from Asia, Australia,
) W: ?( l1 S( T; R3 i3 qthe US, UK and Europe. In fact, if you review the world's press you will see
# j, w; c7 g( z+ _0 Ethat Canada (with a focus on Alberta) is being discussed more frequently. ! R* `& x( _0 }' h8 a' N
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3. Don Campbell has just returned from presenting our Canadian investment
+ |% h1 }* a3 z* u( K" H( yatmosphere (including Why Alberta - Why Now") to a group of major investors in
% V* H( I4 K" I9 ~9 ]6 y# \3 J' dDublin, Ireland, and the response was overwhelmingly positive. In fact, after9 U. ^2 M7 U" ?! D8 o6 g. V; N
Don presented the economic facts, many of these investors (who could invest: x9 ]; {9 |4 u
anywhere in the world) have already booked their flights to here. Once again
2 E9 M! E3 u' u8 D4 Yproving that when the true numbers of our economy are presented (along with the
7 u5 O7 A; [3 qpolitical stability of our country), there is no place in the world that can
5 d6 e. \2 G9 R; ibeat it for long term investment.
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4 I$ j( q& u8 D- Z+ w4. Job creation continues to be strong (with a small lull in June); definitely1 q& ~0 E7 L7 i( B7 h
a sign of strong long-term fundamentals. RBC has also been following the job5 q" x# M# t' C1 c; K( [
creation situation and here is what they are saying: (www.rbc.com/economics)- N0 d, v' G2 C0 W+ }* W' l
"After generating a substantial 96,700 jobs in May, the largest such gain since
( W* A% {, }; O9 p, RJanuary 2002, the economy lost a modest 4,600 jobs in June... 2 l+ e! z) l% d- Y3 F- t" j$ r
0 \0 S( X, u& k, P$ a& R, OStrength in the Canadian economy contributed to a gain of 215,600 jobs in the
2 T5 F# p: a% d: i: F4 Z. [1 `/ c Wfirst half of 2006, a feat not matched since the second half of 2002. With the
! a/ ~- ^/ b4 S" |9 E$ Yeconomy widely expected to grow at a more moderate pace in the second half of! y4 C1 y' A) L/ @
the year on the back of slowing trade activity, this impressive showing may not
/ G7 X& f8 |0 N2 }0 Yrepeat itself. We expect that employment grew in July at a pace consistent with- u' A0 o+ ^2 P8 @
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
0 O+ y+ X5 @9 \- {its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
R, J p% W9 b5 q9 }5 T1 _of 6.1%." Overall very good news. Now the key is to ensure that the region in
4 `+ t8 t, _/ L( b7 Dwhich you are investing is continuing to generate jobs and increasing incomes.9 O, z% P% ^/ C; X$ Z4 n( l
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( e# h& p6 }' H: w5 xIn other words, it is a great time to be taking advantage of this strong$ r( y0 K& M+ r6 {2 ?/ F# z
economy, avoiding 'excuses' and to especially not listen to the uninformed6 N! D" E5 O9 h5 ^/ O2 e% L' w3 d
'dream stealers.' As long as you stick with your game plan, you continue to do
! z) e9 b% A0 E, Tyour due diligence, and you remove emotions from the equation, you will see the p0 i1 o& ]4 X' q; C. G) }3 C7 ~
opportunities that are right in front of you, right here in Alberta. Let the
1 D/ z! j$ @" m! r9 I' {'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
0 G2 j) ]: M9 U" qand your financial freedom has surpassed even your wildest expectations.4 \5 x" H: w5 J2 [- } ]+ l
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Capital Gains Comparison.. f3 @$ k$ U% A
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KPMG has recently released a comparison of the true Top Federal and Provincial A! x5 r1 |: j0 d6 P
Marginal Capital Gains Tax Rates per province. It is very interesting to see& @& v2 y( H8 u2 F; d5 z
how these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%
3 n" G M5 z/ {, D7 Y5 }AB . . . . . . . . 19.5%" B' [' v& y% T$ I9 u- O! l
SK . . . . . . . . 22.0%
, x" \- [: p1 q$ @* Z; SMB . . . . . . . . 23.2%
% j# V( d6 [. ^/ t' @. BON . . . . . . . . 23.2%: U. K Y& ^$ j# j5 N
QC . . . . . . . . 24.1%3 o) w- H+ ^: f8 K
NB . . . . . . . . 23.4%) P5 g: e; a: G; y( d
NS . . . . . . . . 24.1%1 @, W2 u+ p% E3 p
PE . . . . . . . . 23.7%
, ^* s6 g/ ^# ]) cNF . . . . . . . . 24.3%2 e8 v) S) p9 V6 o% k& Y* }
& O8 a' z: r6 K2 V+ aLower capital gains tax increases investment and stimulates the long term
) J8 }0 Q" d3 ? W4 H( L B- x( qeconomy of the province. It also allows real estate investors to keep more of
4 I( q% U9 F+ S$ d* @their profits at exit time. Always a good number to pay attention to.. {, s0 c& s" \0 S L8 I7 Y
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Overall, by staying focused for the next short period of time, you have the* N, Z$ _4 {& l9 `+ l9 n
opportunity to create financial freedom of which others can only dream. Of
9 V# L- x/ a+ d+ bcourse, the key word is focus. And with an August line-up of 'Members Only'
, r( h! P( {! I. F0 g& N: { \$ Zevents like this, you can't help to become a real estate investment champion+ ?6 J# ?! Q& X% C
when you take action as a full REIN Member.0 c: B* \8 f5 V6 q/ [* E9 H4 g
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the7 H/ o' [) @: @7 ~, l# j1 q( G* ?2 p) O
results in just a few short years. |
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发表于 2006-8-25 08:35
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