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NEW HOUSING PRICE INDEX...
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) Z- ^; M/ @$ v( G7 yThe New Housing Price Index, has just been released and it provides some very4 m! G: q+ _: ~1 F
interesting insights, not only into where the market has moved, but where it9 C2 I/ Y: D* H2 O1 X8 A
will be going.
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( ~% l4 ]' c+ K: d ^& x- r; A }* EIt proved, once again, the value of looking at fundamentals behind a market.6 r M. |" {9 E5 Q
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The New Housing Price Index is compiled by Statistics Canada and is used by
7 T: B) b* e( {9 W5 ?sophisticated investors to see how much the market has moved, as well as an
4 ~! N4 ` B" O$ P1 q) lindicator of where re-sale home prices will be moving in the coming six months.
, a3 @9 F2 `0 t2 z) iWe look at the ripple effect that new housing prices have on re-sale property9 t% M7 @( ?+ @' f. }5 q# {
values and can extrapolate what direction re-sale prices will be moving and by
3 q' o3 K0 G; L0 M( Z Hhow much.& p' C; j' C0 q; F& W4 q- V
5 z3 h3 g4 ~6 {! A3 NFor instance, for the last three years, we have told investors to avoid Windsor,
8 b5 j z q& r* IOntario as an investment area because the underlying fundamentals are not very
0 _+ C4 i3 [9 }+ v! \# Z Y& m6 Jstrong. This has been proven once again with the release of the latest
" j5 ?3 E1 M* @, ?; D! h' jfindings. New Housing Prices have actually decreased by .5% during June 2005 -
" J& W! R9 z3 DJune 2006 proving that fundamental investing works in helping you pick the best3 _1 N, N1 V! V* J b8 N
markets and avoid the flat ones. This .5% decrease should have little impact! e- Q( _: Q5 N- O% z) Q
on average re-sale values in the Windsor region.9 Q8 D0 f, |2 F7 T7 c$ Y
% [% I* [# `+ fTo contrast this, the fundamentals we discuss are so strong in Calgary that the% y3 d7 ] {) |9 j' o4 |
market continues to be super heated. With close to 3,000 net new people into
W8 Z+ R- [4 R: w t6 uthe city every month, the property market just can't keep up. That is why we
0 _0 _& j3 `2 dsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). 8 Y+ V3 s( C7 {; M) N6 g4 R k' w
This is great news for the future of re-sale values in the city as these
' f" Q" a6 R: {! R9 p" J. tincreases will continue to ripple out into the market for at least the next six
. r3 U4 n, I7 s" [2 I1 F6 E0 ]months. c% B/ A# c2 i
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Comparing these two regions is a great illustration of the value of not getting
- w1 n- Q& R9 |1 {caught in the 'emotional guessing game' by just focusing on the underlying: r* t$ A4 V4 o% D7 a h# F
fundamentals. It is sad to see those people who said in the last 2 years that% V/ K. p* T5 x; ~
the Alberta real estate market was over and they were going to sit back and wait
: e! s4 w$ {7 B2 m5 funtil it drops. Quite obviously, they have missed out on AMAZING gains, all
0 K, P+ U) C/ V) |- r. Wbecause they didn't follow fundamentals, they just led with their emotions.
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* _4 C' c0 B! g3 \+ K4 NBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June @( P/ c9 q) K! c; U3 M- b3 G
2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June
# Z* o2 m1 }2 @' o# q y2006 New Housing Price Index for:% \9 \# J3 ~8 ^) t4 f3 n9 J! M
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Vancouver . . . . . . . . +5.2%7 G4 {# G6 {7 {
Saskatoon . . . . . . . . +8.5%
5 [9 m( P+ O1 x7 i' V$ JLondon . . . . . . . . . . . +3.0%: j2 K; D! w1 L
Hamilton . . . . . . . . . . +4.9%! p# W6 s- L# P$ [. M4 ^8 J
St. Catharines - Niagara . . . . +4.9%0 u3 T c' C: _8 C W- O( ~3 ?
Toronto and Oshawa . . . . . . . +3.2- P. ~1 M2 `8 V8 F6 ~
Ottawa - Gatineau . . . . . . . . . +3.1%. h& Z# u) S; j: w) M; M1 q- `
( {- ]+ P& B+ A# [: { LFundamental investing ALWAYS makes you look like a genius - emotional investing6 N( r+ u- c; n
gives you quick highs, but also quick lows. Well done on your focus!0 d; O7 V$ O p$ G6 W+ t& s
; i3 t0 j7 C( Y$ K* j% pAs the fundamentals have been showing all along, the Alberta market continues to
5 X3 k6 \1 ~ N! W1 Q" V, pbe strong, as in-migration and job creation continues to attract people from not
5 w0 x7 F0 `) D! L& N. Donly across Canada, but from around the world. Our average wages are: ?; w& ]/ F4 m: ^7 O- u
increasing, our population is increasing, our unemployment rate continues to n4 U) J) D7 ^+ Q) c5 @% M2 n! ?
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 l9 i# R7 G9 ]4 z; E. y
fundamentals:- l9 T2 |- c5 [
) w! u$ @' Q, E, q% L4 |8 E1. The Conference Board of Canada is forecasting strong economic growth in
9 o& U" i, o! h. k( ~7 tCanada, with Alberta once again leading the way. In fact, the projected growth
2 [, M% Q1 ~! L Ufor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
( D+ h8 q2 R7 T- q3 ]9 othis is slated to occur even with the labour shortages we are witnessing.% ~5 g. S- V8 M% _3 b
5 F- _9 J1 h$ g# K2. People are discovering Canada as an investment center from all over the
' ?8 ~9 Q1 ]2 [* }2 P* o7 Q( m' _world. Recently, there have been investors coming here from Asia, Australia,# r( A* P+ N) v7 s7 \
the US, UK and Europe. In fact, if you review the world's press you will see
9 h: S$ p/ x5 \/ n C4 {that Canada (with a focus on Alberta) is being discussed more frequently.
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3. Don Campbell has just returned from presenting our Canadian investment& C7 _. [$ V* i
atmosphere (including Why Alberta - Why Now") to a group of major investors in
6 e2 B' g9 U# X$ h% y+ ]4 BDublin, Ireland, and the response was overwhelmingly positive. In fact, after
, X5 k7 L: g+ m; |Don presented the economic facts, many of these investors (who could invest
7 T) ]& \0 F' G/ ~anywhere in the world) have already booked their flights to here. Once again0 T h1 B7 K* J5 A) g! {
proving that when the true numbers of our economy are presented (along with the6 \: W" y* O k X
political stability of our country), there is no place in the world that can4 t: ^; j C5 c+ E+ `: _
beat it for long term investment.# u6 A& x6 f L
/ w U' A9 T! a; y6 e/ H4. Job creation continues to be strong (with a small lull in June); definitely: m b) A- B9 O, ?) _
a sign of strong long-term fundamentals. RBC has also been following the job
# R' O, P/ z# D4 }/ w$ n |+ v! q6 Ucreation situation and here is what they are saying: (www.rbc.com/economics)
7 f4 z$ ^7 p* J% t% w7 i2 ^"After generating a substantial 96,700 jobs in May, the largest such gain since
. Q- \$ B2 l8 B+ I3 W% [+ A3 UJanuary 2002, the economy lost a modest 4,600 jobs in June... # Z2 g, T X& E$ u8 F7 O
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the2 [' ?0 A9 t! p- m
first half of 2006, a feat not matched since the second half of 2002. With the
6 r1 z/ c* K( L$ h- Seconomy widely expected to grow at a more moderate pace in the second half of
% n3 t I% \5 Fthe year on the back of slowing trade activity, this impressive showing may not
# S8 y* e7 W% |1 [8 O- `repeat itself. We expect that employment grew in July at a pace consistent with1 ~9 a( S: h! i9 P2 k
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
1 _. P( I9 w4 u! x: q' [its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
8 D+ S: m$ p/ eof 6.1%." Overall very good news. Now the key is to ensure that the region in8 \- {2 W2 n+ v
which you are investing is continuing to generate jobs and increasing incomes.. a7 d1 n* B# n# d+ N6 }7 t
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In other words, it is a great time to be taking advantage of this strong
% d- Z6 d1 p m' p5 b, aeconomy, avoiding 'excuses' and to especially not listen to the uninformed' c; D Q$ x2 y1 y8 w% e; Q
'dream stealers.' As long as you stick with your game plan, you continue to do
4 T6 h1 T' S3 x$ V/ m5 ~your due diligence, and you remove emotions from the equation, you will see the# ]0 [: D* O- S$ b/ H$ N
opportunities that are right in front of you, right here in Alberta. Let the
9 d, ?' g3 {2 r4 r; F'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
7 c, _7 {. K& d- wand your financial freedom has surpassed even your wildest expectations.
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+ z) j& i2 d8 g5 H- {Capital Gains Comparison.$ V j" k' v" B- b
8 o+ m' s& G2 Q6 e+ iKPMG has recently released a comparison of the true Top Federal and Provincial
$ x* {( ?, J* a. r+ PMarginal Capital Gains Tax Rates per province. It is very interesting to see
* e2 A8 l- r# j i- M( zhow these will affect your exit strategy. Here are the numbers:
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$ S+ b6 i2 m3 z: \3 W. W% yBC . . . . . . . . 21.9%
9 p9 r4 v0 e4 u! }! E. p1 [8 sAB . . . . . . . . 19.5%
^* Q7 a; ~ w- ~SK . . . . . . . . 22.0%7 T, P2 t0 D8 i. Q- g
MB . . . . . . . . 23.2%
: t* Q2 K: s& G/ ~, Z- o7 p9 Q6 X+ }ON . . . . . . . . 23.2%$ X* C. K) r' K/ Q
QC . . . . . . . . 24.1%
) A7 k3 `! T' B: |! NNB . . . . . . . . 23.4%
! u- u$ t0 Z! c3 p r0 rNS . . . . . . . . 24.1%5 Q& K1 L7 y- ^& g2 g# b9 T- g
PE . . . . . . . . 23.7%
& W9 R0 {3 D8 r* jNF . . . . . . . . 24.3%" O( w$ R: K3 p8 t" a2 }- ?
3 d" j3 T$ E' @6 uLower capital gains tax increases investment and stimulates the long term* u+ H' g5 V8 ^
economy of the province. It also allows real estate investors to keep more of
( J+ [% U$ F" s0 }; ltheir profits at exit time. Always a good number to pay attention to.
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: T$ A3 E, k" o9 E4 nOverall, by staying focused for the next short period of time, you have the
6 Y/ y5 w$ V. P( @opportunity to create financial freedom of which others can only dream. Of
# {7 [! }# c& i7 W2 o% M3 E, ^) Ncourse, the key word is focus. And with an August line-up of 'Members Only'; Z" ?# b* }% m& Q7 F% S: b
events like this, you can't help to become a real estate investment champion
0 i/ I2 N+ h8 P C& [ {. vwhen you take action as a full REIN Member.
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S* J8 T! ?- U, [# PFocus on the fundamentals, keep emotions out of your decisions, and enjoy the5 @5 _8 ~7 {- V0 L4 h
results in just a few short years. |
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发表于 2006-8-25 08:35
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