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NEW HOUSING PRICE INDEX...2 O+ j( z4 y( n: M* T
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The New Housing Price Index, has just been released and it provides some very
- y0 F7 |3 ?5 binteresting insights, not only into where the market has moved, but where it
4 x. ~* l' j b6 [3 c) \+ Iwill be going.
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( `* F# R7 x$ x. XIt proved, once again, the value of looking at fundamentals behind a market.0 X6 g9 F0 O9 `3 l! Q, b
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The New Housing Price Index is compiled by Statistics Canada and is used by2 o7 J6 i+ V' P7 p2 h
sophisticated investors to see how much the market has moved, as well as an
3 ^' }% y' p7 j" F& I5 rindicator of where re-sale home prices will be moving in the coming six months. % o, v* W8 O( g( H
We look at the ripple effect that new housing prices have on re-sale property& h( Y( c2 V6 R5 H
values and can extrapolate what direction re-sale prices will be moving and by
. s2 b9 {9 W! ^9 Uhow much.
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* G( i( B# T5 l8 `For instance, for the last three years, we have told investors to avoid Windsor,
$ X Z) V. M7 x5 y' vOntario as an investment area because the underlying fundamentals are not very
7 |3 O" H3 O2 E; x- jstrong. This has been proven once again with the release of the latest
K( ~5 H3 p) r0 ^) Mfindings. New Housing Prices have actually decreased by .5% during June 2005 -
- \) L, `9 a0 q& eJune 2006 proving that fundamental investing works in helping you pick the best4 }6 ^% x+ i5 ]' V) o7 z: x
markets and avoid the flat ones. This .5% decrease should have little impact- ?3 l2 t) S6 p% Q+ M5 A; l
on average re-sale values in the Windsor region.( b+ y8 `8 B; {: F" W& i Z
/ ]6 Z; S! [3 B- N8 QTo contrast this, the fundamentals we discuss are so strong in Calgary that the
2 ? U g( N+ w3 `- amarket continues to be super heated. With close to 3,000 net new people into
0 C1 C! G$ [- z1 ythe city every month, the property market just can't keep up. That is why we4 f0 Z4 F) T* S; E0 n
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). 2 f, @3 I0 t! E/ y+ T
This is great news for the future of re-sale values in the city as these
6 F: I) h+ Z8 N$ L1 Kincreases will continue to ripple out into the market for at least the next six
8 V+ G k ~9 s1 A4 V& }months.
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% J3 ~, M C2 r" ~8 N& d5 s QComparing these two regions is a great illustration of the value of not getting6 Z* h0 _1 w2 Y2 `0 L X
caught in the 'emotional guessing game' by just focusing on the underlying
+ M. e5 }# E+ e/ ^fundamentals. It is sad to see those people who said in the last 2 years that5 s% X9 D5 l2 o+ t% ~$ o; g
the Alberta real estate market was over and they were going to sit back and wait
- {* t0 o3 X! J" N+ q4 L+ f. Puntil it drops. Quite obviously, they have missed out on AMAZING gains, all
% D9 X& ^1 I* c8 J. R; I' B; t! c- Qbecause they didn't follow fundamentals, they just led with their emotions.- n5 q2 }2 T* l. x
) Z3 K+ y$ x' I& C6 X4 j5 P, N9 qBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June% x3 b" F a' `! H5 J- D
2005 to June 2006), also great news./ D9 w9 ^1 M2 A; x7 B
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By comparison across the country, these are the numbers for June 2005 - June
" p, ]* f, k2 K% q! q2006 New Housing Price Index for:
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Vancouver . . . . . . . . +5.2%1 q; P$ l6 n3 ~; w: a) Z# x
Saskatoon . . . . . . . . +8.5%. s1 D, N# g0 |4 f8 L
London . . . . . . . . . . . +3.0%% e; F# A8 k6 T3 A1 r% K
Hamilton . . . . . . . . . . +4.9%3 W1 W* Q" Z3 A7 D' h
St. Catharines - Niagara . . . . +4.9%. W8 p2 N/ a4 g% U, r2 K
Toronto and Oshawa . . . . . . . +3.2: i( L3 U, M! F+ S! K, i
Ottawa - Gatineau . . . . . . . . . +3.1%/ v- t) A, N+ |3 x& L$ Q. c' {
2 {9 _( m$ I& k5 z) nFundamental investing ALWAYS makes you look like a genius - emotional investing R+ G9 s' \# u4 H! x9 K8 Z
gives you quick highs, but also quick lows. Well done on your focus!
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( ~0 |9 W2 q; z' \As the fundamentals have been showing all along, the Alberta market continues to) q. q6 O9 H+ a8 Q% S' Y$ m, S$ N
be strong, as in-migration and job creation continues to attract people from not
( E0 F/ g1 S6 `, Ronly across Canada, but from around the world. Our average wages are7 d- b" B$ j9 r& C
increasing, our population is increasing, our unemployment rate continues to; Q% K# x+ m! U6 E' A
drop and our GDP growth is slated to once again lead the country.
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+ y( v/ [! e3 t O9 B$ w( g3 QHere are some very interesting facts that are helping to support the strong
1 ?0 N# e& m. H9 j, d# H( Z2 Dfundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in
" l; Y8 D, A- u8 a4 \Canada, with Alberta once again leading the way. In fact, the projected growth
/ I7 V0 t0 |+ ^7 C% q) j* H/ i' yfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and+ w" T6 J2 z( s! l
this is slated to occur even with the labour shortages we are witnessing.+ I% V! Q- @, s. e
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2. People are discovering Canada as an investment center from all over the# C6 `6 c5 g( x8 ?
world. Recently, there have been investors coming here from Asia, Australia,
7 y/ X5 h5 H' E Gthe US, UK and Europe. In fact, if you review the world's press you will see6 @" r, u! `) j) |
that Canada (with a focus on Alberta) is being discussed more frequently.
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- U0 i- @0 T" t0 c' f. W3. Don Campbell has just returned from presenting our Canadian investment0 q' r$ \; F2 J$ l+ q- @& i" n& h6 \
atmosphere (including Why Alberta - Why Now") to a group of major investors in: h" r; H1 D' E3 p" C: Q5 K
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after$ ]" d: o& [2 L3 N
Don presented the economic facts, many of these investors (who could invest3 a, h8 k j& T/ A
anywhere in the world) have already booked their flights to here. Once again
- s3 @3 F$ k; N, d% W# [. {proving that when the true numbers of our economy are presented (along with the& O9 I; s5 V9 ]" Y5 ]+ y4 H4 l
political stability of our country), there is no place in the world that can U; H% {0 `( T( ^; S( n0 u
beat it for long term investment.1 ^3 Q% b1 N" y
; r- S, ~* b. q& }; a3 @4 l! x4. Job creation continues to be strong (with a small lull in June); definitely
# s3 t' Y" c! ^% T9 aa sign of strong long-term fundamentals. RBC has also been following the job" J. q. p/ q& ~) I, j; j k
creation situation and here is what they are saying: (www.rbc.com/economics)
# [: F- n# F: o: G* _"After generating a substantial 96,700 jobs in May, the largest such gain since
- m' ~) I4 A l, k4 a( n; T7 CJanuary 2002, the economy lost a modest 4,600 jobs in June... 8 H5 _$ X0 x. v1 [3 p9 ], S5 i
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the4 W" ~: X; y0 @
first half of 2006, a feat not matched since the second half of 2002. With the
. q1 @$ ^: O9 l0 Jeconomy widely expected to grow at a more moderate pace in the second half of8 V# t* B# l5 t4 C/ U5 `
the year on the back of slowing trade activity, this impressive showing may not9 ^, a, d$ o* t* g' _
repeat itself. We expect that employment grew in July at a pace consistent with; \& T! {8 t0 ~- q- ?
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
$ n" R: ~. i+ {; Jits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate8 Z' e/ E2 N: L- U! o' v9 Z
of 6.1%." Overall very good news. Now the key is to ensure that the region in
. c- {% H/ }* u% |7 |5 c" c k4 Ywhich you are investing is continuing to generate jobs and increasing incomes.6 l; o' M5 b) O, ?- d) |
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In other words, it is a great time to be taking advantage of this strong
. j/ r7 b P% w6 n- T- N9 Aeconomy, avoiding 'excuses' and to especially not listen to the uninformed
# [3 J) V4 N3 G9 \'dream stealers.' As long as you stick with your game plan, you continue to do* s' ]. x3 l' u* j ~/ H
your due diligence, and you remove emotions from the equation, you will see the
" O$ A* c8 j( h- ropportunities that are right in front of you, right here in Alberta. Let the
8 Y9 a, O0 `. q2 {'dream stealers' call you 'lucky' 5 years from now as your net worth has soared8 ^5 [" Q4 F; |
and your financial freedom has surpassed even your wildest expectations." F) }- ^ E) V! D- m7 H
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Capital Gains Comparison.
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$ g# N2 \) ^! ] ^6 U( V5 uKPMG has recently released a comparison of the true Top Federal and Provincial
3 ]' k& b& z: U& G" X0 e! {# MMarginal Capital Gains Tax Rates per province. It is very interesting to see* l" U+ G" U1 r, `
how these will affect your exit strategy. Here are the numbers:% l* h* [ C- R, ^' c
, ^! c8 o7 o. i( QBC . . . . . . . . 21.9%! X/ a( `; J5 ~, M8 {$ V
AB . . . . . . . . 19.5%) a( x7 m _ w' B9 H# e2 _& f6 r
SK . . . . . . . . 22.0% }& y- S7 N: w1 p3 ]
MB . . . . . . . . 23.2%
2 H/ \% d H8 ]; ]& `, W: `7 d9 fON . . . . . . . . 23.2%
4 V# a2 m$ X$ l0 a5 QQC . . . . . . . . 24.1%; ?' i! W- f* T: g! l9 ^
NB . . . . . . . . 23.4%
}; C8 I. F6 d: ^% Q. W2 O7 xNS . . . . . . . . 24.1%6 f/ O" u8 H$ O
PE . . . . . . . . 23.7%" o7 _4 U5 X4 ?0 }- p
NF . . . . . . . . 24.3%
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Lower capital gains tax increases investment and stimulates the long term; r8 c" d# \% v" O* |
economy of the province. It also allows real estate investors to keep more of/ |& F# O# s& O, A
their profits at exit time. Always a good number to pay attention to.
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5 o. y' C; I/ q1 EOverall, by staying focused for the next short period of time, you have the- j8 P' }8 \" o, G) l5 `
opportunity to create financial freedom of which others can only dream. Of" ~1 p, G/ j o4 h$ Y2 j
course, the key word is focus. And with an August line-up of 'Members Only'
& g3 T/ |9 f" a2 `% a5 @# devents like this, you can't help to become a real estate investment champion
7 c$ q8 I* {! pwhen you take action as a full REIN Member.
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8 Z$ G1 y" O: O7 z2 i2 uFocus on the fundamentals, keep emotions out of your decisions, and enjoy the
5 W2 z% C( ~- a! bresults in just a few short years. |
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发表于 2006-8-25 08:35
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