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NEW HOUSING PRICE INDEX...% j8 T& Z7 |2 Q) G$ S
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The New Housing Price Index, has just been released and it provides some very
0 f2 I( R' ~, dinteresting insights, not only into where the market has moved, but where it
* v5 i- s, |9 @, t1 Q4 E% u5 Pwill be going.
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It proved, once again, the value of looking at fundamentals behind a market.2 `# [# j+ O% G7 I) |9 a$ {
+ s% z( V- r: D7 s9 i0 n( z! AThe New Housing Price Index is compiled by Statistics Canada and is used by
7 x$ M5 ?, F) V* _* J+ [sophisticated investors to see how much the market has moved, as well as an7 Z1 y$ |/ v" O( z2 q h
indicator of where re-sale home prices will be moving in the coming six months.
: a4 I0 \. M) |) f0 L# e2 WWe look at the ripple effect that new housing prices have on re-sale property
0 f( B" y. b; r* @3 C' tvalues and can extrapolate what direction re-sale prices will be moving and by4 [+ w2 q& D% V* F+ u- S2 D" B. q
how much.
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For instance, for the last three years, we have told investors to avoid Windsor,# v: w* R/ p! s
Ontario as an investment area because the underlying fundamentals are not very
2 c+ Q8 @3 K) `% |, ]strong. This has been proven once again with the release of the latest0 k4 u% X, l4 ^0 f
findings. New Housing Prices have actually decreased by .5% during June 2005 -
6 U+ a3 _8 W5 L- U% ]& A$ {June 2006 proving that fundamental investing works in helping you pick the best0 }3 m% A4 K5 o. g
markets and avoid the flat ones. This .5% decrease should have little impact
+ v$ h+ j. }. M# k" H# z' R1 t4 [on average re-sale values in the Windsor region.+ Z c7 G* L1 y9 B8 ]
2 G8 M( E8 r4 F6 p' bTo contrast this, the fundamentals we discuss are so strong in Calgary that the
) T6 {7 z$ b k9 ?& B" T/ y& ]( Rmarket continues to be super heated. With close to 3,000 net new people into3 K, ]9 }) X! P- {
the city every month, the property market just can't keep up. That is why we$ o* G1 _ s8 ?- q2 d
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
8 x* Y; e. A$ r0 nThis is great news for the future of re-sale values in the city as these
1 S9 x9 ~6 f, u! X/ uincreases will continue to ripple out into the market for at least the next six
- [# x2 L- R J* r! cmonths.
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Comparing these two regions is a great illustration of the value of not getting" Q5 Y* l. o2 _2 V+ ?% j# a r
caught in the 'emotional guessing game' by just focusing on the underlying
3 l$ x O7 W' Z/ W8 [fundamentals. It is sad to see those people who said in the last 2 years that2 H; N; o) e* K6 c7 q0 P+ t9 S
the Alberta real estate market was over and they were going to sit back and wait
$ O) @0 \9 `6 V! G: |until it drops. Quite obviously, they have missed out on AMAZING gains, all
, K9 B4 e; `( o& Lbecause they didn't follow fundamentals, they just led with their emotions.
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+ j+ @2 ]/ r/ U& `% r. k" c y5 zBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June7 K, Q) ^9 J6 `3 s+ Y: |
2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June3 G4 f" f/ i! K! y& }' o7 R2 L
2006 New Housing Price Index for:
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: v9 ]2 B7 W4 `, uVancouver . . . . . . . . +5.2%. a9 @0 |+ \7 p+ G: b C D$ U0 ~
Saskatoon . . . . . . . . +8.5%
2 C$ }( f* p* I8 @. {/ g+ ?6 z( QLondon . . . . . . . . . . . +3.0%
6 ~5 T. @1 L3 s; z/ _ G# q: {4 eHamilton . . . . . . . . . . +4.9%
2 \ ~: z2 i, V! a0 k L% |St. Catharines - Niagara . . . . +4.9%
$ U, R) G5 m% o. b0 o! w7 \1 ~7 uToronto and Oshawa . . . . . . . +3.2
; H9 b m0 A8 `5 J/ AOttawa - Gatineau . . . . . . . . . +3.1%
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# F; A6 a5 _; V# sFundamental investing ALWAYS makes you look like a genius - emotional investing
4 E4 I9 x4 V @* u3 e* D/ agives 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
1 O0 N4 t2 C* V4 O9 n9 {5 j& Obe strong, as in-migration and job creation continues to attract people from not0 Q& \. }8 U, Y. L9 e7 ^: r
only across Canada, but from around the world. Our average wages are& r% [6 I3 F1 U+ R
increasing, our population is increasing, our unemployment rate continues to
' _0 H" ]# H. V+ |drop and our GDP growth is slated to once again lead the country.6 f6 P: L6 x/ I9 Z! D! }" ]6 h
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Here are some very interesting facts that are helping to support the strong4 Z8 J+ ~% [* t: @6 Z" M8 c* W
fundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in' ?8 r: N6 h. g, C9 d8 {
Canada, with Alberta once again leading the way. In fact, the projected growth, Y N2 L0 {1 `, v+ c7 Z
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
. e- J. f' b% Y. }* I, b" Cthis is slated to occur even with the labour shortages we are witnessing.# ]/ e9 B* z9 l! |
' T' {& Z' ?! }5 y, z5 N2. People are discovering Canada as an investment center from all over the
. g+ I8 v @3 x. u4 P0 {8 `world. Recently, there have been investors coming here from Asia, Australia,
5 A8 H) E% }# D& v0 y7 j% f* @the US, UK and Europe. In fact, if you review the world's press you will see
: C- T' R6 J- Pthat Canada (with a focus on Alberta) is being discussed more frequently.
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3 P% Y: z' s- L" q9 M6 ] y3. Don Campbell has just returned from presenting our Canadian investment
; B7 G, E2 u0 X4 T7 g3 Katmosphere (including Why Alberta - Why Now") to a group of major investors in" y' N3 k1 }7 n8 o
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
" [4 X# p/ `, r5 A9 I; NDon presented the economic facts, many of these investors (who could invest9 y6 U! l5 H% Q: y$ y \
anywhere in the world) have already booked their flights to here. Once again
8 `3 H) Q1 A, X) jproving that when the true numbers of our economy are presented (along with the- P6 L. ?& }4 S$ z K
political stability of our country), there is no place in the world that can
" d0 k" @( {! Y- Xbeat it for long term investment.7 S0 w, B/ R) K4 L8 K; s
2 U' e. W; C) I9 E/ b }$ n8 Y4. Job creation continues to be strong (with a small lull in June); definitely2 p+ D" G5 n; J- h+ P o. Z" z
a sign of strong long-term fundamentals. RBC has also been following the job
, w- n$ u& l, j/ p2 A8 U# Dcreation situation and here is what they are saying: (www.rbc.com/economics)0 q/ N+ ~5 [9 {" B7 r- [, L% e( i) q
"After generating a substantial 96,700 jobs in May, the largest such gain since
4 U6 T0 ?; ^! I+ aJanuary 2002, the economy lost a modest 4,600 jobs in June... $ h0 @ B0 b C" L6 F0 w
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the
* H( j8 s7 S& @6 rfirst half of 2006, a feat not matched since the second half of 2002. With the
2 h4 b8 ^4 s- f( Neconomy widely expected to grow at a more moderate pace in the second half of: ~. C1 P( o/ g! [% q5 i* n
the year on the back of slowing trade activity, this impressive showing may not5 N7 n1 x& W1 o9 w8 F1 y+ `- L
repeat itself. We expect that employment grew in July at a pace consistent with
0 E* Z" l( |7 w/ F3 M X6 U. Nits recent trend of 24,000 jobs a month. Assuming that the labour force grew at( Y: x6 \$ L3 e$ z" u
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate- I9 [) C) v$ W* z/ \
of 6.1%." Overall very good news. Now the key is to ensure that the region in/ p4 o7 o* @& D3 d. l. k( ?
which you are investing is continuing to generate jobs and increasing incomes.
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2 H: G9 v+ r6 V7 x1 M" c# sIn other words, it is a great time to be taking advantage of this strong0 e/ [# M4 H' t% [! U$ G7 W+ U6 l
economy, avoiding 'excuses' and to especially not listen to the uninformed
\0 j4 e( ?4 r$ C1 u'dream stealers.' As long as you stick with your game plan, you continue to do9 [4 W- S1 {" r+ e: O
your due diligence, and you remove emotions from the equation, you will see the3 G4 T2 q$ Q" n. c y
opportunities that are right in front of you, right here in Alberta. Let the
6 Z$ i* I- i/ k, z'dream stealers' call you 'lucky' 5 years from now as your net worth has soared* w1 f6 R; }/ e8 g1 m9 _7 J
and your financial freedom has surpassed even your wildest expectations.6 j; [' d Q% Q0 @5 z+ b; h( O0 k
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6 X8 T% V' Z3 m, c; D8 Y. L7 H& b8 KCapital Gains Comparison.* `4 v: M% i) Q% V
3 c* [& o% W8 l: z: M* }1 fKPMG has recently released a comparison of the true Top Federal and Provincial- ?, E; Z% Y: @2 p- a n
Marginal Capital Gains Tax Rates per province. It is very interesting to see
; ?. j2 K" P& |/ w- R' Qhow these will affect your exit strategy. Here are the numbers:
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3 I! N% v5 c. I- I/ t; XBC . . . . . . . . 21.9%1 a$ _6 J* b) ?; F6 H/ _
AB . . . . . . . . 19.5%' [/ {7 J# c. k5 u. v; r
SK . . . . . . . . 22.0%
( b0 J- R- c# c I0 F/ w+ z4 GMB . . . . . . . . 23.2%( f& @* R2 u |9 Y1 a8 P( ?5 t
ON . . . . . . . . 23.2%
- O. E7 F4 t& E( eQC . . . . . . . . 24.1%. h- f: c" B8 b8 C! c& m
NB . . . . . . . . 23.4%
# L( u+ X6 U0 K' c" [ p0 eNS . . . . . . . . 24.1%
5 _" X+ C# e: X9 y# B& k+ _PE . . . . . . . . 23.7%) h, @7 n2 M7 `/ _
NF . . . . . . . . 24.3%( x0 [+ E$ m6 I$ k
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Lower capital gains tax increases investment and stimulates the long term
5 _9 R7 ] C" y0 g0 O2 k' X& x: M Heconomy of the province. It also allows real estate investors to keep more of
: g7 h) j2 {* r: {) W5 ]6 \# @their profits at exit time. Always a good number to pay attention to.
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Overall, by staying focused for the next short period of time, you have the
8 ~3 ]2 I3 w3 e/ i- ]$ Mopportunity to create financial freedom of which others can only dream. Of
) Q/ p: s6 y, v3 ?4 jcourse, the key word is focus. And with an August line-up of 'Members Only'
" ?# d: H6 E ^3 oevents like this, you can't help to become a real estate investment champion
) `, H5 ?* Y/ ` _5 O9 J. `when you take action as a full REIN Member.
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the/ o" ]) ?% d" n g1 J
results in just a few short years. |
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发表于 2006-8-25 08:35
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