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NEW HOUSING PRICE INDEX...9 y; ], _4 h; p
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The New Housing Price Index, has just been released and it provides some very
J- }# K, x) J( k2 V$ m& iinteresting insights, not only into where the market has moved, but where it+ B8 O& r. {/ a7 e. n
will be going., a! W7 y) B- q% v
5 r) ]% P3 b! y4 [9 aIt proved, once again, the value of looking at fundamentals behind a market.+ t' q7 d* r) {
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The New Housing Price Index is compiled by Statistics Canada and is used by/ a; t: [! { D3 \. ]
sophisticated investors to see how much the market has moved, as well as an
6 a& P: h6 |, ]% b+ M1 E: \9 |indicator of where re-sale home prices will be moving in the coming six months. 3 I- x6 a( o1 ?* ]) j
We look at the ripple effect that new housing prices have on re-sale property
3 B. f8 \5 K1 l9 B6 avalues and can extrapolate what direction re-sale prices will be moving and by! a4 F9 w$ y( m. ?8 ]3 n, ~
how much.
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G" w+ \9 l# ?1 {1 d# k) ]9 lFor instance, for the last three years, we have told investors to avoid Windsor,
) n8 F+ p+ i6 P. P9 {Ontario as an investment area because the underlying fundamentals are not very3 m/ I, `/ s: e7 \7 g: |
strong. This has been proven once again with the release of the latest
& ~3 ~# z- x: m# A" Ufindings. New Housing Prices have actually decreased by .5% during June 2005 -5 m8 L; t4 k4 n
June 2006 proving that fundamental investing works in helping you pick the best
. ~% g- G2 R3 H& k2 a4 ?' e8 r6 pmarkets and avoid the flat ones. This .5% decrease should have little impact
- C P y& u5 `on average re-sale values in the Windsor region.
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To contrast this, the fundamentals we discuss are so strong in Calgary that the7 T, s. K& |1 s" F
market continues to be super heated. With close to 3,000 net new people into& B3 C# G. q2 B/ q1 m
the city every month, the property market just can't keep up. That is why we
: l6 c7 ?6 t1 Tsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). , j3 S1 ]9 }5 Z! y) N
This is great news for the future of re-sale values in the city as these+ j3 s) w5 a' Y! p+ O' U
increases will continue to ripple out into the market for at least the next six1 `0 B. y4 `" D& b- K* I: G- ?
months. / z# a. r- K5 u E) M6 Z2 e6 g! |
7 x$ A, ^, H2 T2 R' k* KComparing these two regions is a great illustration of the value of not getting
7 s% z9 r, t2 J1 L3 {caught in the 'emotional guessing game' by just focusing on the underlying, @( T- }. a* r) q( q& s
fundamentals. It is sad to see those people who said in the last 2 years that
2 w! Y- q6 I8 d0 q* fthe Alberta real estate market was over and they were going to sit back and wait6 `& ~/ u T) P, B' w; u
until it drops. Quite obviously, they have missed out on AMAZING gains, all+ `+ ?. [9 i/ F$ w6 V( W( U
because they didn't follow fundamentals, they just led with their emotions./ \# ^3 Z+ J: x+ N9 a% a0 b
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
3 I8 v0 |+ M+ V# g, E0 w2005 to June 2006), also great news.
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9 e0 M- o' Q5 lBy comparison across the country, these are the numbers for June 2005 - June
9 d1 @8 ~# S4 M+ ~6 t! _6 P2006 New Housing Price Index for:! \6 j7 _& O# _" p7 a
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Vancouver . . . . . . . . +5.2%. H$ {% c. r3 w% [) h) n
Saskatoon . . . . . . . . +8.5%* u, i @$ M; e0 B
London . . . . . . . . . . . +3.0%
% b( B, j( T6 tHamilton . . . . . . . . . . +4.9%
% Y+ K7 F; u' p" ?+ v: NSt. Catharines - Niagara . . . . +4.9%" C* ]% R$ F/ V: j- u( G8 T/ E0 f
Toronto and Oshawa . . . . . . . +3.2* ?9 _6 M2 A! w4 [# T. N, [2 E J
Ottawa - Gatineau . . . . . . . . . +3.1%
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3 k- V ` v- X( o5 f% C) CFundamental investing ALWAYS makes you look like a genius - emotional investing2 b4 d1 E9 x) l2 }
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
$ ~- e- a2 ? Q O* wbe strong, as in-migration and job creation continues to attract people from not
8 f! S2 g, O0 `& \/ h0 N2 a# Xonly across Canada, but from around the world. Our average wages are; L8 s6 M$ q; Q; ?
increasing, our population is increasing, our unemployment rate continues to+ f3 p* i4 L! g: Z; Q5 Y* p
drop and our GDP growth is slated to once again lead the country. z3 Y: r5 c0 l- m% K# m
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Here are some very interesting facts that are helping to support the strong
; a9 l A F, ~; }8 x# hfundamentals:
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; S$ T, V8 S* C1. The Conference Board of Canada is forecasting strong economic growth in
8 f9 a. _! t0 KCanada, with Alberta once again leading the way. In fact, the projected growth
0 W5 I I, O/ k; yfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
; U. v3 O, Q3 uthis is slated to occur even with the labour shortages we are witnessing.3 e' K8 s8 Q9 U& Y4 ]
$ Q! ]+ z- p) g7 Q2. People are discovering Canada as an investment center from all over the& }; X% L, E+ Y2 `/ f
world. Recently, there have been investors coming here from Asia, Australia,
4 ^: X, Y9 P+ [/ z. `the US, UK and Europe. In fact, if you review the world's press you will see2 l; s$ h7 X1 s, f& Y! h
that Canada (with a focus on Alberta) is being discussed more frequently.
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" z' O: p2 s, Q3. Don Campbell has just returned from presenting our Canadian investment
7 T" O+ l' F8 r0 zatmosphere (including Why Alberta - Why Now") to a group of major investors in
9 L* x) N* \8 G$ h2 O+ o% b; qDublin, Ireland, and the response was overwhelmingly positive. In fact, after
( g3 d5 s0 r7 c" w0 _+ xDon presented the economic facts, many of these investors (who could invest
w0 V' e7 e4 [! N5 R; h# Xanywhere in the world) have already booked their flights to here. Once again
% f: y1 F( {! D7 K" Xproving that when the true numbers of our economy are presented (along with the# O: W7 |4 O# b
political stability of our country), there is no place in the world that can/ M& ?) l8 y6 q
beat it for long term investment.* k: V$ \- u6 l5 b; M. |- y
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4. Job creation continues to be strong (with a small lull in June); definitely
! H* {4 J; g7 o7 i% ?a sign of strong long-term fundamentals. RBC has also been following the job
% i" X* {" v) `creation situation and here is what they are saying: (www.rbc.com/economics)* `+ m# W0 f+ C
"After generating a substantial 96,700 jobs in May, the largest such gain since/ B) `/ V" y/ Y
January 2002, the economy lost a modest 4,600 jobs in June...
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% k# O R; M2 F! q; r5 C6 i+ j7 OStrength in the Canadian economy contributed to a gain of 215,600 jobs in the
/ n5 f$ q6 J! ^& W! R* G/ Ifirst half of 2006, a feat not matched since the second half of 2002. With the
: c5 Z& i8 t& Jeconomy widely expected to grow at a more moderate pace in the second half of
% m" G. S! W0 w7 d8 z" nthe year on the back of slowing trade activity, this impressive showing may not
, \( [, p6 g9 x! H0 \) L1 [/ crepeat itself. We expect that employment grew in July at a pace consistent with4 ~/ Y, n. D& \- e) G: C |( b
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at
# O" m x b/ f* Y0 b$ Nits trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
) D1 k2 F {& Z2 p. yof 6.1%." Overall very good news. Now the key is to ensure that the region in
. g3 ]8 x+ P: t g, T/ n& Hwhich you are investing is continuing to generate jobs and increasing incomes.
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" q% W/ F4 V4 V- K2 i, sIn other words, it is a great time to be taking advantage of this strong) Z& p0 G! e9 J& x2 }
economy, avoiding 'excuses' and to especially not listen to the uninformed$ q" a" j, s, K X; G2 ~* ?: Z* Z: w
'dream stealers.' As long as you stick with your game plan, you continue to do' _% f) S0 K) n4 E
your due diligence, and you remove emotions from the equation, you will see the
2 G, O* E$ `! H7 M* t6 g4 Bopportunities that are right in front of you, right here in Alberta. Let the$ g% q6 t G/ G7 a7 w
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared# b6 q" u( b* R8 S7 W( P
and your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison.
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KPMG has recently released a comparison of the true Top Federal and Provincial% n! m; X1 T9 j3 P* g
Marginal Capital Gains Tax Rates per province. It is very interesting to see. B& T$ B4 p: y: u B# h
how these will affect your exit strategy. Here are the numbers:4 n3 a$ Y- \9 n7 x
, k& ^2 ~* j1 |' ]4 [BC . . . . . . . . 21.9%# t% F6 m& V/ m! `
AB . . . . . . . . 19.5%
* D+ R& W' d$ qSK . . . . . . . . 22.0%
6 V- x1 J$ O$ v8 {* y0 W' ~0 x. D+ RMB . . . . . . . . 23.2%
6 h: u/ G: R3 P& wON . . . . . . . . 23.2%
+ u p' T3 n/ e# M3 jQC . . . . . . . . 24.1%
- R% Q8 g; f5 MNB . . . . . . . . 23.4%
6 @ ]3 i9 V2 l% u2 gNS . . . . . . . . 24.1%
# g6 R9 ~: |" fPE . . . . . . . . 23.7%
8 r8 s8 G+ m1 ~ R' DNF . . . . . . . . 24.3%5 ]# \/ m# y H q, x
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Lower capital gains tax increases investment and stimulates the long term
: Y/ P$ F! z( Xeconomy of the province. It also allows real estate investors to keep more of1 u8 H$ m2 C# I2 R+ h' b: P. A# j0 M
their profits at exit time. Always a good number to pay attention to.& P- b8 E& U- R9 n( U
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Overall, by staying focused for the next short period of time, you have the
2 k/ x; s, F2 bopportunity to create financial freedom of which others can only dream. Of
4 A7 E# m1 }" o# W7 X' s( ~% }( x2 Wcourse, the key word is focus. And with an August line-up of 'Members Only'
" |# {6 W+ ]: o4 x8 j) `events like this, you can't help to become a real estate investment champion
5 A% j. f8 f$ h- ~) ^: q6 Jwhen you take action as a full REIN Member.
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7 O6 Z; W; U0 r5 t5 p: j6 ~) e" BFocus on the fundamentals, keep emotions out of your decisions, and enjoy the
% d$ W5 [# j' i7 D$ {results in just a few short years. |
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发表于 2006-8-25 08:35
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