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NEW HOUSING PRICE INDEX...
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The New Housing Price Index, has just been released and it provides some very
/ S! B( D4 f4 V4 E! E* O4 n1 M! ainteresting insights, not only into where the market has moved, but where it
+ k1 u. i( k/ lwill be going.; z& i4 e9 y" q' f8 x S% @; e; x) h- m
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It proved, once again, the value of looking at fundamentals behind a market.$ U$ l) P$ v& l/ x
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The New Housing Price Index is compiled by Statistics Canada and is used by
9 |4 j3 t. W* ]. m& `1 c9 W+ Fsophisticated investors to see how much the market has moved, as well as an! h# g" @1 }: z- F- a1 s0 s6 C
indicator of where re-sale home prices will be moving in the coming six months. # ]1 O5 I/ j: m' S3 s( k# v7 _
We look at the ripple effect that new housing prices have on re-sale property6 U2 p! J' s) r4 o$ v9 ` s: F" y
values and can extrapolate what direction re-sale prices will be moving and by
_ v8 i+ r1 s @8 [! N Whow much.( ^/ u" ]8 G+ V4 Z+ }
9 b: }/ S$ }1 Q8 Q# u' eFor instance, for the last three years, we have told investors to avoid Windsor,
. \* g' @1 |5 b9 N) T+ V+ XOntario as an investment area because the underlying fundamentals are not very
$ O' u3 }- W, v/ R# y* F% l j/ m# w% o! jstrong. This has been proven once again with the release of the latest
- A5 Y, _3 T8 H* @findings. New Housing Prices have actually decreased by .5% during June 2005 -. V/ \" q" Q& n c2 {$ W2 d
June 2006 proving that fundamental investing works in helping you pick the best
# F4 }- V, i W$ T+ c4 I+ Imarkets and avoid the flat ones. This .5% decrease should have little impact
& V! ~: r; O1 W) eon average re-sale values in the Windsor region.# [* G% X5 {) M
5 Y- w1 ?- W: R3 r. ITo contrast this, the fundamentals we discuss are so strong in Calgary that the; p/ q0 b' _" F7 O( Y
market continues to be super heated. With close to 3,000 net new people into4 F/ h. g8 P# }5 g' L/ d
the city every month, the property market just can't keep up. That is why we* s! K z& P: @ ?$ @4 A
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
7 g( J, l4 s$ ^3 T+ u5 ?" HThis is great news for the future of re-sale values in the city as these
" b3 Q& H2 \' l; Zincreases will continue to ripple out into the market for at least the next six
3 m$ s8 R- e) \4 M x C& tmonths. 4 \8 v7 l6 w4 L6 E
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Comparing these two regions is a great illustration of the value of not getting
2 G. ` k& Y% z2 ^( G( B) Tcaught in the 'emotional guessing game' by just focusing on the underlying" K V, n- o4 L' y% X7 Z
fundamentals. It is sad to see those people who said in the last 2 years that
# Q0 S7 F6 l1 T3 tthe Alberta real estate market was over and they were going to sit back and wait: ?4 J, s$ V6 I
until it drops. Quite obviously, they have missed out on AMAZING gains, all
% ]4 H8 H4 }" w: J' obecause they didn't follow fundamentals, they just led with their emotions.
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0 B4 o" L/ e# q/ m; r+ q9 h6 V. XBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June5 K& t; g" W- }+ R* U8 O5 g% c
2005 to June 2006), also great news.# D% p ?# m1 \- f) T T
2 y* `. G4 z: [& L2 FBy comparison across the country, these are the numbers for June 2005 - June3 j6 Y, _+ q9 ?8 X4 c- Q1 y5 z, E% D8 H
2006 New Housing Price Index for:
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, h* F% H# G/ D$ ?0 s+ mVancouver . . . . . . . . +5.2%$ `" g" V* d* ^4 r. F$ d- i8 D
Saskatoon . . . . . . . . +8.5%0 c5 L1 z( ]: M4 V$ C9 L
London . . . . . . . . . . . +3.0% n3 e* d3 T2 _3 i$ P2 z# q
Hamilton . . . . . . . . . . +4.9%
R! _6 C/ B0 n; G) lSt. Catharines - Niagara . . . . +4.9%( _/ z3 f) x4 S* S3 l
Toronto and Oshawa . . . . . . . +3.29 P" o0 C. A. X' T6 @- T& g% O, h" F
Ottawa - Gatineau . . . . . . . . . +3.1%% m: y# F+ \, \" [/ _
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Fundamental investing ALWAYS makes you look like a genius - emotional investing! o7 ~) B8 Z* v7 [3 G
gives 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 to4 ]* p& h8 n6 l8 a4 W) P7 C, `1 J) U
be strong, as in-migration and job creation continues to attract people from not, w" r* {: i3 x9 F* U) m
only across Canada, but from around the world. Our average wages are
) }) C7 d! J+ Q X5 B! Iincreasing, our population is increasing, our unemployment rate continues to
# Q& d6 e# E! ~0 L6 ndrop and our GDP growth is slated to once again lead the country.
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8 r7 r- T7 U/ N |, j+ n/ O% ]( T THere are some very interesting facts that are helping to support the strong* k' f! `5 ?. Y( S' H
fundamentals:5 }( p2 y6 Z8 i
* B1 R! ^( R5 L$ u( H/ f/ S0 [" z0 K' c1. The Conference Board of Canada is forecasting strong economic growth in2 W$ S& ^8 R5 e* r8 X* d" O8 M. ?
Canada, with Alberta once again leading the way. In fact, the projected growth2 d0 W z8 P! r& F% Q
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and1 e5 X7 ^. [0 x! _# d
this is slated to occur even with the labour shortages we are witnessing.
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2. People are discovering Canada as an investment center from all over the
7 w- D* K* p/ H& s7 U2 ^" |( p5 Dworld. Recently, there have been investors coming here from Asia, Australia,
5 F3 t. Z' E/ `& d0 b! F: W! Mthe US, UK and Europe. In fact, if you review the world's press you will see
! d q9 [3 S! O4 U8 \% gthat Canada (with a focus on Alberta) is being discussed more frequently.
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( y" T1 i, c! I3. Don Campbell has just returned from presenting our Canadian investment( {. }) ]/ Q) i% F& T& {
atmosphere (including Why Alberta - Why Now") to a group of major investors in
6 }+ }, l# |* t8 SDublin, Ireland, and the response was overwhelmingly positive. In fact, after8 I6 e" Y, r9 \8 r
Don presented the economic facts, many of these investors (who could invest
* m ^0 F0 s7 X s" Eanywhere in the world) have already booked their flights to here. Once again
& @ d# g: x( G I" K% E6 i$ uproving that when the true numbers of our economy are presented (along with the2 Y8 W l0 h& M9 v3 R# K
political stability of our country), there is no place in the world that can
0 `% D1 \- h, m. ~1 q$ Obeat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely5 W# Q6 M7 i$ N l8 `
a sign of strong long-term fundamentals. RBC has also been following the job0 x7 e5 U! `' {
creation situation and here is what they are saying: (www.rbc.com/economics): f2 O: ~: |6 }, m4 _& E8 q$ C
"After generating a substantial 96,700 jobs in May, the largest such gain since) b) y6 N- }* }: \
January 2002, the economy lost a modest 4,600 jobs in June... 2 t6 p7 }* }' r5 V% ~# r
& y$ A8 o2 d! uStrength in the Canadian economy contributed to a gain of 215,600 jobs in the& r1 {: H0 |% l8 `
first half of 2006, a feat not matched since the second half of 2002. With the
1 [4 C( E1 Y* C! }! s, L. Q; S" ~economy widely expected to grow at a more moderate pace in the second half of) |3 k7 c4 D1 f6 b" y! s
the year on the back of slowing trade activity, this impressive showing may not% M# M4 _! a" M; [: q p! S8 e
repeat itself. We expect that employment grew in July at a pace consistent with8 s4 v' P1 Y! @ k$ x
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
, h' H$ g: E3 Zits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
$ ~+ |, O3 @7 jof 6.1%." Overall very good news. Now the key is to ensure that the region in
. P& \' w( n1 x1 V8 F3 I9 |3 Ewhich you are investing is continuing to generate jobs and increasing incomes.0 m! u$ v; F+ S- N3 |. v
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In other words, it is a great time to be taking advantage of this strong
2 B& z* s; Y5 X# t* g, [economy, avoiding 'excuses' and to especially not listen to the uninformed" Y/ p0 U' d/ o) v* Y5 v
'dream stealers.' As long as you stick with your game plan, you continue to do: m* b9 Z: f o' X
your due diligence, and you remove emotions from the equation, you will see the
- T8 l: K+ X) |opportunities that are right in front of you, right here in Alberta. Let the4 U) J( Z/ Q' d1 A3 H* ^
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
9 Z, L* O! S8 Q$ c$ d# Xand your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison.! S" x/ _3 h0 D- Y( ^! c. e
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KPMG has recently released a comparison of the true Top Federal and Provincial
+ r' d; Q' A, l% x: w( RMarginal Capital Gains Tax Rates per province. It is very interesting to see
" \5 |- s" y/ `- ~* bhow these will affect your exit strategy. Here are the numbers:
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9 W1 F7 u; H+ u9 L- Z/ l/ oBC . . . . . . . . 21.9%
* Y4 u' W K( l3 h$ n) [# P: z. oAB . . . . . . . . 19.5%9 _7 U- }9 l) f( o/ ]
SK . . . . . . . . 22.0%, ?4 a* x- T, r& B
MB . . . . . . . . 23.2%9 J) M$ T3 `4 T. x4 v
ON . . . . . . . . 23.2%. G8 Z5 K( E$ x! o( H5 J, x4 F
QC . . . . . . . . 24.1%
: I3 V9 g Q: RNB . . . . . . . . 23.4%. m$ ?6 w# y8 \8 T0 P; u( S% F- T
NS . . . . . . . . 24.1%
X" ^% |* h( A! d6 Z" d. J, l& {% z5 X) ~PE . . . . . . . . 23.7%
5 Q2 q* [$ l( b+ p3 N" O: L0 g/ u! jNF . . . . . . . . 24.3%
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Lower capital gains tax increases investment and stimulates the long term
) f6 ]4 T3 d% x" M7 A1 Leconomy of the province. It also allows real estate investors to keep more of# Y# K7 Q8 E* V, \' D6 m! q2 L
their profits at exit time. Always a good number to pay attention to.
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: S. \, A' F# n% ?7 X0 I( lOverall, by staying focused for the next short period of time, you have the
4 e- S6 }# _( G) nopportunity to create financial freedom of which others can only dream. Of
" Z$ s" R# j% _1 T& p3 {* ?' }: Scourse, the key word is focus. And with an August line-up of 'Members Only'0 J* x! v# o3 d6 L( O7 a- b
events like this, you can't help to become a real estate investment champion
: v+ t% a6 B. k$ W* pwhen you take action as a full REIN Member.
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g# g) E+ L# Y1 a# f3 X6 DFocus on the fundamentals, keep emotions out of your decisions, and enjoy the
* G& K q9 U ?/ }results in just a few short years. |
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发表于 2006-8-25 08:35
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