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NEW HOUSING PRICE INDEX...
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& T! [7 p- K" Q0 X( tThe New Housing Price Index, has just been released and it provides some very
* d6 A1 R3 K$ v* Q3 M1 ]0 h4 q& Sinteresting insights, not only into where the market has moved, but where it1 z# T# v" _/ P
will be going.
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It proved, once again, the value of looking at fundamentals behind a market.6 Q; f8 w4 p2 k- S2 W
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The New Housing Price Index is compiled by Statistics Canada and is used by4 ~8 y' m/ E. G# g$ _
sophisticated investors to see how much the market has moved, as well as an+ v* D) `1 E' b7 W; P* @' X( @5 |
indicator of where re-sale home prices will be moving in the coming six months. , ] f+ J$ z" _, G
We look at the ripple effect that new housing prices have on re-sale property
' g2 O/ l) L5 }- \. z0 `: Lvalues and can extrapolate what direction re-sale prices will be moving and by
. J! L! r$ M) jhow much.
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h$ T2 f8 [: m' f. ^For instance, for the last three years, we have told investors to avoid Windsor,
7 e# Z: G- w1 P4 d: eOntario as an investment area because the underlying fundamentals are not very5 B' W+ j! n8 [; C2 T" Z; w
strong. This has been proven once again with the release of the latest
( v5 w1 s4 ^' R3 M4 T U' Wfindings. New Housing Prices have actually decreased by .5% during June 2005 -
% B$ v# P! ]5 y& r) PJune 2006 proving that fundamental investing works in helping you pick the best
6 M0 I5 D: \& ~9 gmarkets and avoid the flat ones. This .5% decrease should have little impact5 _) H$ _9 a# O* }+ x* {
on average re-sale values in the Windsor region.
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" ~% B3 F9 Q) g+ k! R; rTo contrast this, the fundamentals we discuss are so strong in Calgary that the
# n1 Q" c% S% W* B3 J% Wmarket continues to be super heated. With close to 3,000 net new people into. C7 R; B% U: \# x
the city every month, the property market just can't keep up. That is why we: I5 u) `6 j3 _$ i/ s( O: y4 x
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
: d+ {" V6 V0 C$ mThis is great news for the future of re-sale values in the city as these0 \- j" O4 U9 J b# J# b
increases will continue to ripple out into the market for at least the next six) q' C# V2 a, T
months. : H- ]! e* j6 ~0 A: z5 l1 B
5 x1 y- M% z* M l# X9 `# CComparing these two regions is a great illustration of the value of not getting
1 ^2 _4 X4 `5 f$ v$ Tcaught in the 'emotional guessing game' by just focusing on the underlying: D$ d( g/ @+ f# ~
fundamentals. It is sad to see those people who said in the last 2 years that/ H/ ?5 j* o- L/ S. G4 g
the Alberta real estate market was over and they were going to sit back and wait3 N h5 D: R1 j; M# }2 k, S0 b
until it drops. Quite obviously, they have missed out on AMAZING gains, all& M. F! z/ A- U- v. Z5 E
because they didn't follow fundamentals, they just led with their emotions. j, a- Y$ \, t# E
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June5 y# E( K3 R# h0 X4 B& R
2005 to June 2006), also great news.' i/ m9 _6 y2 T4 j7 A
! M- Z* K W" @) c! FBy comparison across the country, these are the numbers for June 2005 - June( o$ f" D' v7 A2 |, ]! c
2006 New Housing Price Index for:
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0 T* t/ S0 i+ l0 N! K; \2 yVancouver . . . . . . . . +5.2%
2 n/ w; |" H: z: F, Q8 O) f: NSaskatoon . . . . . . . . +8.5%
. |2 K% @. P g0 T% w! pLondon . . . . . . . . . . . +3.0%/ }9 U+ \; |" v* }$ q- h% d
Hamilton . . . . . . . . . . +4.9%
1 j% i6 e9 h' M" D' n0 h2 HSt. Catharines - Niagara . . . . +4.9%9 X! [2 G* d2 T D" z0 D. M: {
Toronto and Oshawa . . . . . . . +3.2$ V. }% r3 [ q8 `+ Z$ U( H# R8 b
Ottawa - Gatineau . . . . . . . . . +3.1%* @$ D3 D7 Y) Q7 O
4 Y% S) Q; c& ~. j- _+ CFundamental investing ALWAYS makes you look like a genius - emotional investing# y- p f' E& D- k3 O6 L$ Z) [
gives you quick highs, but also quick lows. Well done on your focus!5 i6 A$ t+ P7 N- `! B
2 V. b) O! I3 z; Y7 T4 W) J3 rAs the fundamentals have been showing all along, the Alberta market continues to
4 W C4 {: o* c4 C A4 H! \: |be strong, as in-migration and job creation continues to attract people from not- g+ P3 F& k: v/ `! O0 G# i
only across Canada, but from around the world. Our average wages are6 {& P# C' H" C d: Z
increasing, our population is increasing, our unemployment rate continues to& K- a) P2 }$ M1 k
drop and our GDP growth is slated to once again lead the country.
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' D7 q! B4 m' O( D* D% sHere are some very interesting facts that are helping to support the strong ~% |# ]5 s6 z. ]1 h4 C8 `( y
fundamentals:6 T, M1 b, x9 l+ Z. O
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1. The Conference Board of Canada is forecasting strong economic growth in
0 I& h' i. s+ Y6 W3 i, uCanada, with Alberta once again leading the way. In fact, the projected growth d1 t: K& d* R, x5 ~
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and5 a2 {7 x# }# }
this is slated to occur even with the labour shortages we are witnessing.
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+ U; h4 b7 }" C2. People are discovering Canada as an investment center from all over the+ \" |3 h" Y$ {% b! E+ B. Q$ L
world. Recently, there have been investors coming here from Asia, Australia,
! ?; h; ~ t' \- X% d1 M$ O) qthe US, UK and Europe. In fact, if you review the world's press you will see
8 r, A% p, D0 c- Z Kthat 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
$ x7 E2 F) \# {1 u8 }. }# E0 X; q2 natmosphere (including Why Alberta - Why Now") to a group of major investors in8 U+ H5 w6 d$ b# t
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
" O; W" y6 ~# @Don presented the economic facts, many of these investors (who could invest
! ~) W( {9 J# _anywhere in the world) have already booked their flights to here. Once again- X: g) ?4 {( T" ]
proving that when the true numbers of our economy are presented (along with the- j3 m. x8 ^" D
political stability of our country), there is no place in the world that can; G! q( l a3 J
beat it for long term investment.
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: _9 l- A. ~+ R+ T$ u, Q$ i4. Job creation continues to be strong (with a small lull in June); definitely' `/ k) W3 d$ W0 Z, f- x6 c
a sign of strong long-term fundamentals. RBC has also been following the job6 T2 G- h1 u4 o# x% `" N8 C
creation situation and here is what they are saying: (www.rbc.com/economics)$ h; `- Q# o [" k0 v+ |
"After generating a substantial 96,700 jobs in May, the largest such gain since; n( T" v% L6 L. Z
January 2002, the economy lost a modest 4,600 jobs in June... . e; c5 R. ~/ ~' d
/ o( A z. z8 ^( UStrength in the Canadian economy contributed to a gain of 215,600 jobs in the
6 J! h2 B$ _* Y/ `first half of 2006, a feat not matched since the second half of 2002. With the
- L# N# S9 \5 ~+ Z* ieconomy widely expected to grow at a more moderate pace in the second half of
) W# W/ X7 M" o! v) S3 P5 v5 athe year on the back of slowing trade activity, this impressive showing may not
X8 U1 J: U' p* ~repeat itself. We expect that employment grew in July at a pace consistent with3 S0 c7 x; ~8 g) o; Y
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
) _. V: Z/ n/ A/ U- n7 k. xits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate9 s; p# T1 E: [. y" { V2 I$ c
of 6.1%." Overall very good news. Now the key is to ensure that the region in
! J4 b2 H- r! jwhich you are investing is continuing to generate jobs and increasing incomes.
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In other words, it is a great time to be taking advantage of this strong
% l- g' U$ f9 m- S- [economy, avoiding 'excuses' and to especially not listen to the uninformed" E/ R! v' Q6 O3 J% L M3 o
'dream stealers.' As long as you stick with your game plan, you continue to do
1 w4 s3 f. s4 Z& t6 c& I5 X% Kyour due diligence, and you remove emotions from the equation, you will see the( K) K1 E7 l& O
opportunities that are right in front of you, right here in Alberta. Let the
2 {* A+ D/ L( L; X- u# A'dream stealers' call you 'lucky' 5 years from now as your net worth has soared; S# k; o2 n1 Y* _2 h
and your financial freedom has surpassed even your wildest expectations.; C8 b$ x( W, `8 P) }
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Capital Gains Comparison.
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% g' v" r5 }7 V8 h7 l5 n( WKPMG has recently released a comparison of the true Top Federal and Provincial8 G* A8 A3 t, m! u9 L+ h! Y: Z
Marginal Capital Gains Tax Rates per province. It is very interesting to see
0 {" J" u" d9 l% c& ^. D8 ihow these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%7 r3 f+ Y( p! b% V p
AB . . . . . . . . 19.5%7 D0 o) n- B& z( h4 y/ K
SK . . . . . . . . 22.0%
& y4 K8 \5 q4 B9 wMB . . . . . . . . 23.2%
$ U0 U" {! |! m0 X; uON . . . . . . . . 23.2%) H3 Z3 m p, O
QC . . . . . . . . 24.1%2 M1 ~6 p$ k, b" L0 _, o
NB . . . . . . . . 23.4%3 n6 y5 b! c% f) {- L
NS . . . . . . . . 24.1%# `$ x! T1 ]3 }3 B# d# e
PE . . . . . . . . 23.7%- ^4 d7 a: U- @& |( r( S: \
NF . . . . . . . . 24.3%4 A, c) e4 h3 G3 o# |7 G
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Lower capital gains tax increases investment and stimulates the long term* y) C5 W' H t0 D# M2 v z% f
economy of the province. It also allows real estate investors to keep more of
. D9 x q! i U/ Ftheir profits at exit time. Always a good number to pay attention to.: `' j8 ~+ M- _
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Overall, by staying focused for the next short period of time, you have the
2 H' p% \; x( I/ }3 h6 ]$ j! Kopportunity to create financial freedom of which others can only dream. Of+ E+ N. x( @4 M
course, the key word is focus. And with an August line-up of 'Members Only'
; ^, G. m) f [2 cevents like this, you can't help to become a real estate investment champion
0 P( S* D" A, a: s/ Awhen 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" }' ]5 q* f8 G7 m3 z/ D
results in just a few short years. |
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发表于 2006-8-25 08:35
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