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NEW HOUSING PRICE INDEX... W9 P/ t: m' |0 T
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1 E0 t1 Z9 h3 J z+ W/ G6 G) b( {4 d: WThe New Housing Price Index, has just been released and it provides some very
0 `+ s5 j, y0 B/ ~& L' w. r9 _interesting insights, not only into where the market has moved, but where it
" G7 {; Z# [8 f1 ywill be going.
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/ H9 R# |! U6 k4 e# G( rIt proved, once again, the value of looking at fundamentals behind a market.
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The New Housing Price Index is compiled by Statistics Canada and is used by- t0 _1 s% A V! E
sophisticated investors to see how much the market has moved, as well as an" U! Z* a: U8 I, W. S. P
indicator of where re-sale home prices will be moving in the coming six months. * N( L: C' \' t3 Z- M
We look at the ripple effect that new housing prices have on re-sale property1 J) p$ i" S3 i8 p
values and can extrapolate what direction re-sale prices will be moving and by
+ b* a8 O5 V4 t; h1 E7 thow much.
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$ [; Y5 n# v# h" iFor instance, for the last three years, we have told investors to avoid Windsor,6 k6 _+ `& r% k2 A, g
Ontario as an investment area because the underlying fundamentals are not very7 G- g8 _5 V) m/ {
strong. This has been proven once again with the release of the latest* I! f: r6 \. O
findings. New Housing Prices have actually decreased by .5% during June 2005 -
. [1 L* U' d0 r( O TJune 2006 proving that fundamental investing works in helping you pick the best. I: ]1 S* z4 z" g1 k
markets and avoid the flat ones. This .5% decrease should have little impact; Y( p1 u7 P/ U" P( W
on average re-sale values in the Windsor region. \1 W7 X9 Y, W6 y- O1 K% w8 v% N
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To contrast this, the fundamentals we discuss are so strong in Calgary that the6 E" e) L0 m o! a* Z3 y& s/ C: F
market continues to be super heated. With close to 3,000 net new people into: b$ A9 d+ }+ ?8 i
the city every month, the property market just can't keep up. That is why we# P# s, X B; c6 I
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). 1 m4 q2 V5 }7 V* a
This is great news for the future of re-sale values in the city as these$ j# u5 d8 D' h7 q0 {& z
increases will continue to ripple out into the market for at least the next six
) Q6 |4 ]5 x3 M. h3 f- |months.
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Comparing these two regions is a great illustration of the value of not getting3 `8 u' T1 `! d; T9 {: S
caught in the 'emotional guessing game' by just focusing on the underlying) G9 q" _9 a, u
fundamentals. It is sad to see those people who said in the last 2 years that/ k1 a# _# O& D) J7 p
the Alberta real estate market was over and they were going to sit back and wait
- S6 X. u4 o' s0 g1 O) j; W9 ^until it drops. Quite obviously, they have missed out on AMAZING gains, all9 s' v0 z3 g+ S8 _1 a2 f
because they didn't follow fundamentals, they just led with their emotions.# C# c4 X# ]5 R" p& J
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June) Z" q! s) ]) R! W* T9 \# O" C
2005 to June 2006), also great news.
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! p$ E$ @% P% P5 m8 b, \- ~By comparison across the country, these are the numbers for June 2005 - June5 Y5 [2 V% `! ~+ Z2 b' @
2006 New Housing Price Index for:
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Vancouver . . . . . . . . +5.2%
2 d2 q/ V$ r5 X, v. RSaskatoon . . . . . . . . +8.5%
& `; z7 Q1 ?! L3 f7 lLondon . . . . . . . . . . . +3.0%9 y! h; r5 b* {2 [, I
Hamilton . . . . . . . . . . +4.9%& j, H; o( _ F" `% \
St. Catharines - Niagara . . . . +4.9%* P6 M( v5 E+ u+ _. C" h
Toronto and Oshawa . . . . . . . +3.2
9 ~3 R5 k P/ K) ~" q% SOttawa - Gatineau . . . . . . . . . +3.1%" g, \( P7 }$ D3 ]5 e" R5 t2 ~) H
9 ~5 F# U% M: ^* d0 xFundamental investing ALWAYS makes you look like a genius - emotional investing7 a. I [9 x. X
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 to
: `; m( L* G% Qbe strong, as in-migration and job creation continues to attract people from not
) N- A" M$ v; W& Ponly across Canada, but from around the world. Our average wages are( |3 P/ P( D7 e% i2 ~
increasing, our population is increasing, our unemployment rate continues to
. c: l4 @/ P8 F4 x" k- m% M9 U* Odrop and our GDP growth is slated to once again lead the country.
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Here are some very interesting facts that are helping to support the strong
4 y9 M {( X; Z/ _. e0 U0 dfundamentals:% L+ v) m* C+ ^$ O8 L- |
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1. The Conference Board of Canada is forecasting strong economic growth in
) U- [ `( ^/ cCanada, with Alberta once again leading the way. In fact, the projected growth: A% w, `# a! C( i* q9 t# c
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
+ g; L8 s$ O$ ^this is slated to occur even with the labour shortages we are witnessing.* h: Z+ f6 M% [
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2. People are discovering Canada as an investment center from all over the ]- T) u; H5 q, E; o, }# ]; j
world. Recently, there have been investors coming here from Asia, Australia,
! X' x W" G- P; |/ ]' @3 jthe US, UK and Europe. In fact, if you review the world's press you will see
8 D) e& t, u/ o/ z% y; Bthat 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
( ?; J/ Z t! ?atmosphere (including Why Alberta - Why Now") to a group of major investors in& k4 W) d! D" p) ?
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
0 o/ T( S2 t( v. CDon presented the economic facts, many of these investors (who could invest: R0 z7 @8 ]. v7 e G+ @- H
anywhere in the world) have already booked their flights to here. Once again
- }% x# P( m9 q- U) I0 Q! e( qproving that when the true numbers of our economy are presented (along with the
$ _/ r' X. k' u% x9 lpolitical stability of our country), there is no place in the world that can* ?/ Z3 f) \ X1 X& F3 v/ X3 ^
beat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely
& ?) H5 k: c0 {5 H' N; sa sign of strong long-term fundamentals. RBC has also been following the job
9 `7 k* u. a! F( i; ocreation situation and here is what they are saying: (www.rbc.com/economics)
% A6 U1 h4 L' ]0 D4 |"After generating a substantial 96,700 jobs in May, the largest such gain since9 ?) V9 \$ t- l9 t* }
January 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
! n9 n% E4 v9 g9 t3 |& w- ^first half of 2006, a feat not matched since the second half of 2002. With the" U7 N4 Z+ D$ a/ w
economy widely expected to grow at a more moderate pace in the second half of
& W4 X0 a* K4 Jthe year on the back of slowing trade activity, this impressive showing may not
* R: N+ M4 Z5 x" i% Z+ Y1 A# Grepeat itself. We expect that employment grew in July at a pace consistent with
$ l* y& b# H* Sits recent trend of 24,000 jobs a month. Assuming that the labour force grew at% i) p; `# V" @* \) G4 Y
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate5 \" A' q' B5 L) S
of 6.1%." Overall very good news. Now the key is to ensure that the region in
* v7 P. H+ A" M1 cwhich 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
, K. ~3 J1 Q! r% n: Z1 ]7 s( weconomy, avoiding 'excuses' and to especially not listen to the uninformed- E# G7 U- ?0 c8 J6 |* S
'dream stealers.' As long as you stick with your game plan, you continue to do- W# Q8 C) b. _1 }5 z
your due diligence, and you remove emotions from the equation, you will see the
5 c# y# {; [1 y/ z+ ^opportunities that are right in front of you, right here in Alberta. Let the' x: z) C8 y3 P/ }" W: ]
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared! j! j' D3 i; ]7 B& Y
and your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison.. j/ ^, d& q. n
! |0 p" B K: A; y' ?2 cKPMG has recently released a comparison of the true Top Federal and Provincial
, T" H/ J( B" a& t0 _6 ?Marginal Capital Gains Tax Rates per province. It is very interesting to see3 t3 c; a1 w8 \4 d
how these will affect your exit strategy. Here are the numbers:' z7 O/ M) s) c8 a Q6 _) U$ T& R* @
+ ]2 y# M' k6 n8 O2 \8 p$ lBC . . . . . . . . 21.9%
$ g* {# c- C# f( {# |7 K7 gAB . . . . . . . . 19.5%
9 H- w) I9 b1 y$ ^6 ?SK . . . . . . . . 22.0%; u5 h v) U y3 l, t
MB . . . . . . . . 23.2%3 B4 [ T1 {7 _7 }( ~# g+ t( Q) s
ON . . . . . . . . 23.2%
( G: T5 ~9 i- I( E. p! dQC . . . . . . . . 24.1%3 }! b% x7 J2 N: P$ G
NB . . . . . . . . 23.4%
+ F* x4 F8 t8 x2 D- [+ D1 U) O$ qNS . . . . . . . . 24.1%; T+ v+ c2 ~* X# _3 U' ?
PE . . . . . . . . 23.7%
% L4 `4 H/ {. R; S+ v7 F( x f2 nNF . . . . . . . . 24.3%" A% w0 v9 W$ b8 h: x7 z! M
0 Z/ B- A4 S `3 h8 o. DLower capital gains tax increases investment and stimulates the long term
3 B0 D& X% h& z% |$ L: ]4 Ueconomy of the province. It also allows real estate investors to keep more of
J% N3 n* l* d! qtheir 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# m& \! c% m0 Q
opportunity to create financial freedom of which others can only dream. Of. e6 U2 l+ u* X: C
course, the key word is focus. And with an August line-up of 'Members Only') c P3 O$ \ ?- [* h3 B" F8 V
events like this, you can't help to become a real estate investment champion
2 o3 ^! R' ]. x9 }* d& rwhen 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
) z. m2 i# o/ ^! g. k# A* c' t9 ^results in just a few short years. |
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发表于 2006-8-25 08:35
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