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NEW HOUSING PRICE INDEX...2 y' S* F) k: @2 k: t, N
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The New Housing Price Index, has just been released and it provides some very1 T! t& N- h1 s4 s
interesting insights, not only into where the market has moved, but where it
& x; w' M! X% `6 ^will be going.
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It proved, once again, the value of looking at fundamentals behind a market.3 B, P3 Z% u! a- `* m
- |9 H1 d( ?& E, I+ n* W3 S* iThe New Housing Price Index is compiled by Statistics Canada and is used by
9 s7 B" ]5 P! q% ^+ h( \4 L/ Jsophisticated investors to see how much the market has moved, as well as an; k3 @8 [5 P1 x) W6 h
indicator of where re-sale home prices will be moving in the coming six months.
! O, u Y! c' h: }) s5 zWe look at the ripple effect that new housing prices have on re-sale property- }- E' }6 L) \, k4 f. V
values and can extrapolate what direction re-sale prices will be moving and by
$ I+ d6 S! D+ F1 h2 t/ uhow much.
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$ t: N9 o% V/ _For instance, for the last three years, we have told investors to avoid Windsor,+ w# M& X' n0 K2 i' ^* ?/ E
Ontario as an investment area because the underlying fundamentals are not very
, q' c* }) n9 g7 f, D, x1 Gstrong. This has been proven once again with the release of the latest
( t/ B& e' A& p( ^7 S, gfindings. New Housing Prices have actually decreased by .5% during June 2005 -
0 d% C9 C- u" a5 k. Y+ r% b. ]June 2006 proving that fundamental investing works in helping you pick the best
5 B9 ?9 o, b" zmarkets and avoid the flat ones. This .5% decrease should have little impact
5 ]* o8 L: ?- h$ J+ ?( son average re-sale values in the Windsor region.5 ~- q/ G* ?" V7 r/ N6 k- W
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To contrast this, the fundamentals we discuss are so strong in Calgary that the6 O: `3 y& [+ E. b2 }. i9 }4 k
market continues to be super heated. With close to 3,000 net new people into
) G5 c( M5 F3 s1 e7 S4 rthe city every month, the property market just can't keep up. That is why we
2 [$ a% j M# isaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). ! T1 R: S8 ~9 @% ]; z: ?
This is great news for the future of re-sale values in the city as these$ J+ t. g- S" t* z: _1 r! ~+ ~
increases will continue to ripple out into the market for at least the next six; Q7 |! t# R5 Z
months. ; ^6 u/ k3 M' }) K, Q% R
5 Y; z8 l, w Z( ^8 M- w8 i7 UComparing these two regions is a great illustration of the value of not getting _- J1 f+ y' r/ G
caught in the 'emotional guessing game' by just focusing on the underlying4 O7 o6 d1 P9 v3 \7 `: y" H
fundamentals. It is sad to see those people who said in the last 2 years that
6 q/ U8 i4 {' z; vthe Alberta real estate market was over and they were going to sit back and wait1 b5 F5 b3 t* _7 F* C; m' g$ p
until it drops. Quite obviously, they have missed out on AMAZING gains, all# g+ h' s1 D' g$ |; ]
because they didn't follow fundamentals, they just led with their emotions.
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2 l* J" r$ t/ z* {! WBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June1 |6 w' H5 \: Y' B
2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June8 s: Q, y$ A5 b4 c0 Z2 Z
2006 New Housing Price Index for:5 W3 C- R0 ?& i
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Vancouver . . . . . . . . +5.2%
) I1 J) Y! X5 i% |# A7 _Saskatoon . . . . . . . . +8.5%$ c7 n& D" }9 A
London . . . . . . . . . . . +3.0%
8 R' N# `6 \! u/ n8 H* Y5 w7 nHamilton . . . . . . . . . . +4.9%/ f% v4 ?& h% d( C4 S, V5 J x5 O
St. Catharines - Niagara . . . . +4.9%8 P% n m4 p3 @0 h: ~
Toronto and Oshawa . . . . . . . +3.2
& z2 \8 d- x9 y8 q+ wOttawa - Gatineau . . . . . . . . . +3.1%4 w, c- x5 E2 b: p Y4 O
5 b7 T' }0 j3 t& ]! yFundamental investing ALWAYS makes you look like a genius - emotional investing
9 s0 P7 B/ u1 \# i5 pgives you quick highs, but also quick lows. Well done on your focus!. E7 Z$ h7 s7 B1 h
9 g5 {$ g+ k" E6 H$ tAs the fundamentals have been showing all along, the Alberta market continues to) [! z/ u% b ]! S+ S2 T- n
be strong, as in-migration and job creation continues to attract people from not% X( r# z% K# B# ~5 L
only across Canada, but from around the world. Our average wages are/ r" ] ], z, o( g+ I/ m# Z
increasing, our population is increasing, our unemployment rate continues to
: q1 j" L c! o+ O: odrop and our GDP growth is slated to once again lead the country.
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2 `8 W2 U6 O% L+ DHere are some very interesting facts that are helping to support the strong' z5 ?% U9 p7 t0 c1 k( E1 l
fundamentals:
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. K" I$ s9 @. F$ ~1. The Conference Board of Canada is forecasting strong economic growth in" K$ b1 c3 B4 V) |0 A
Canada, with Alberta once again leading the way. In fact, the projected growth
2 m8 c) k4 m4 zfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and- Y H+ B1 T C/ E1 u
this is slated to occur even with the labour shortages we are witnessing.5 o$ Y; \3 H9 a/ o& F1 {
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2. People are discovering Canada as an investment center from all over the
0 T5 T( @5 q, U( J. @' Eworld. Recently, there have been investors coming here from Asia, Australia,
" u5 `7 S/ O/ A$ h; m) Ythe US, UK and Europe. In fact, if you review the world's press you will see
# {! l' b! `; R3 t5 J# qthat 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! ]; K4 H( | J3 b6 q
atmosphere (including Why Alberta - Why Now") to a group of major investors in
0 |, |, {. ?8 U/ O+ [- iDublin, Ireland, and the response was overwhelmingly positive. In fact, after
8 p6 M( f- h6 r( V0 g+ }! n# y- S$ {9 ADon presented the economic facts, many of these investors (who could invest
8 ~: G; O. W w. h. K8 Qanywhere in the world) have already booked their flights to here. Once again
! n- _4 V& b6 ]& Vproving that when the true numbers of our economy are presented (along with the
( |! r2 M* f0 G+ Kpolitical stability of our country), there is no place in the world that can7 Y* v. W8 ^6 ~0 }; H, v
beat it for long term investment.
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' s3 C3 G0 F2 M0 L: h, E" ~4. Job creation continues to be strong (with a small lull in June); definitely. W5 M$ G% ^5 _
a sign of strong long-term fundamentals. RBC has also been following the job
* g* }! `1 f* M3 U4 ]6 r# q$ Ccreation situation and here is what they are saying: (www.rbc.com/economics). v6 k6 `# d2 e: f9 Z1 {3 {7 h
"After generating a substantial 96,700 jobs in May, the largest such gain since
, Z' m: Y ?8 r M: XJanuary 2002, the economy lost a modest 4,600 jobs in June...
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Strength in the Canadian economy contributed to a gain of 215,600 jobs in the/ V8 M& R" Z7 H/ p& a
first half of 2006, a feat not matched since the second half of 2002. With the/ C, ^. ]( Y* j' ]" L
economy widely expected to grow at a more moderate pace in the second half of
; [6 D* n1 x- ?. \6 j- f J# uthe year on the back of slowing trade activity, this impressive showing may not1 s8 i$ S- |5 m; O: |$ V
repeat itself. We expect that employment grew in July at a pace consistent with
# R- l8 z$ {+ C2 mits recent trend of 24,000 jobs a month. Assuming that the labour force grew at0 U3 W" ?/ n" c, S' U* I8 M
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate% A+ a$ y* H/ K2 E4 \+ ~
of 6.1%." Overall very good news. Now the key is to ensure that the region in- E& P' {5 }3 j4 [* x0 ^+ k
which you are investing is continuing to generate jobs and increasing incomes.
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5 l+ h2 s2 k/ Y& DIn other words, it is a great time to be taking advantage of this strong1 i. U% L' t3 D* a- q: N
economy, avoiding 'excuses' and to especially not listen to the uninformed
, V+ |1 ]4 o+ N) t1 w: y& y7 T'dream stealers.' As long as you stick with your game plan, you continue to do$ I- D9 W6 T7 T
your due diligence, and you remove emotions from the equation, you will see the7 _! h& o% n$ _
opportunities that are right in front of you, right here in Alberta. Let the2 p# a( Z7 L* }
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
: A V. i0 a0 x6 b9 x% Band your financial freedom has surpassed even your wildest expectations.$ R1 q( _" K0 B1 x; n: G$ [
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Capital Gains Comparison.
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6 ?/ z- o, v! ?. \KPMG has recently released a comparison of the true Top Federal and Provincial) M( Y- M/ W* C. B0 e( d
Marginal Capital Gains Tax Rates per province. It is very interesting to see
" g* n' K. ~: m* ihow these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%& W; d. o% O7 ] t0 E) @1 I
AB . . . . . . . . 19.5%
$ M# Z, [9 |0 _ fSK . . . . . . . . 22.0%
9 S: F2 m/ G, c. kMB . . . . . . . . 23.2%
2 o a, m# J5 l; W3 qON . . . . . . . . 23.2%
0 B% m8 N1 y1 _' T0 n3 k# HQC . . . . . . . . 24.1%% L9 S+ _# o, L4 J3 i0 \7 w. D3 x
NB . . . . . . . . 23.4%* u/ V9 {+ b6 n! T
NS . . . . . . . . 24.1%. C5 O. M" r+ D* |8 I) s
PE . . . . . . . . 23.7%
: A# p( o! ~) I0 qNF . . . . . . . . 24.3%
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r$ g4 e& c0 _* k2 i6 i- S# tLower capital gains tax increases investment and stimulates the long term+ U1 Z: n0 [$ z C
economy of the province. It also allows real estate investors to keep more of
% w& b% M" i, f$ |( F( i: [their profits at exit time. Always a good number to pay attention to.4 g) x) n! D8 u7 ?
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Overall, by staying focused for the next short period of time, you have the
: R: U6 q6 D3 c' xopportunity to create financial freedom of which others can only dream. Of+ h5 W2 _" Q2 h# j+ u4 ~6 M
course, the key word is focus. And with an August line-up of 'Members Only'
, r! h7 G: E$ Z* V: x$ s& Eevents like this, you can't help to become a real estate investment champion7 W% S2 B: O; f# c) P( s0 \
when you take action as a full REIN Member.+ g6 W3 M$ f- ]; D4 N6 t V
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Focus on the fundamentals, keep emotions out of your decisions, and enjoy the, H* H( P* Z! g
results in just a few short years. |
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发表于 2006-8-25 08:35
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