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NEW HOUSING PRICE INDEX..., W1 i* a) T* P
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The New Housing Price Index, has just been released and it provides some very( I- x2 c$ @. I
interesting insights, not only into where the market has moved, but where it3 E J8 s1 ~5 b. B! K5 f7 j
will be going.
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: M' O+ C& r. l9 n0 u+ M, gIt proved, once again, the value of looking at fundamentals behind a market.
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! L2 Z/ `. g2 H4 @' _( {! K4 A+ E& oThe New Housing Price Index is compiled by Statistics Canada and is used by9 }% w5 U& f2 F8 Z. g8 Q3 U
sophisticated investors to see how much the market has moved, as well as an* w2 ?- \ R2 U) X
indicator of where re-sale home prices will be moving in the coming six months.
' w' }: n, |9 \% w- T* U7 u/ v) I) S, TWe look at the ripple effect that new housing prices have on re-sale property, M9 o5 h* {" z7 O% R
values and can extrapolate what direction re-sale prices will be moving and by
0 L- n3 ], z' h0 s+ Y5 Hhow much." p) l5 D$ C6 v6 X
. Q0 ~( c$ e& l! {; ^ fFor instance, for the last three years, we have told investors to avoid Windsor,
& [6 ?/ W! u# H l& o* ?2 rOntario as an investment area because the underlying fundamentals are not very
3 |1 c' T! g" s6 u/ w& _8 Vstrong. This has been proven once again with the release of the latest6 a, ]% E6 ~8 q! `/ Q/ `/ Q2 e
findings. New Housing Prices have actually decreased by .5% during June 2005 -
( t3 Y# ~( ]% D3 n. I: BJune 2006 proving that fundamental investing works in helping you pick the best
7 b, q- W5 M4 Imarkets and avoid the flat ones. This .5% decrease should have little impact6 D/ G- u; Q( X3 ? {
on average re-sale values in the Windsor region.1 B& S& b! h1 E% p! v7 g: A
n1 `5 L. G# {/ K* ]+ sTo contrast this, the fundamentals we discuss are so strong in Calgary that the$ l: x: J. c. V# Z" o
market continues to be super heated. With close to 3,000 net new people into% o/ M u' T+ I! p7 `! f& h
the city every month, the property market just can't keep up. That is why we
* J+ L. |) [3 ]+ e% x7 E1 fsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
! v m9 }5 }+ Z4 ^) S/ EThis is great news for the future of re-sale values in the city as these
/ v! u' q- N4 o7 M" Bincreases will continue to ripple out into the market for at least the next six2 @$ |) F7 E2 m* o1 M
months. " L8 |2 b/ I, A0 G
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Comparing these two regions is a great illustration of the value of not getting
1 b6 }! Q; V; e& \0 zcaught in the 'emotional guessing game' by just focusing on the underlying
6 L% _6 y( a! } Q! _6 yfundamentals. It is sad to see those people who said in the last 2 years that
5 ?, a* H! K; T4 rthe Alberta real estate market was over and they were going to sit back and wait* b4 u& ^, {' j. m6 i" y
until it drops. Quite obviously, they have missed out on AMAZING gains, all/ k" N; z! @$ S
because they didn't follow fundamentals, they just led with their emotions.2 n$ X4 E0 G: ~% _) q/ t8 H5 l) c
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June5 f# U4 D6 Q# J! ?
2005 to June 2006), also great news.
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By comparison across the country, these are the numbers for June 2005 - June9 h, o, w' Y: J$ ?, a$ r
2006 New Housing Price Index for:
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Vancouver . . . . . . . . +5.2%1 x: X. x y6 p! x; V8 w. s; e, m
Saskatoon . . . . . . . . +8.5%
9 J0 l' u, \4 x7 ^$ FLondon . . . . . . . . . . . +3.0%
: o: O0 o/ k* |. a6 V R- cHamilton . . . . . . . . . . +4.9%
$ D- e5 M* j" A, ?St. Catharines - Niagara . . . . +4.9%
/ q/ f$ f5 ^. n, S \Toronto and Oshawa . . . . . . . +3.21 x! E* h* h+ O! ? e
Ottawa - Gatineau . . . . . . . . . +3.1%
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+ D9 j- A# R0 Q! R6 BFundamental investing ALWAYS makes you look like a genius - emotional investing
4 e& W% P* D! c8 V& v8 `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
1 y& _# u" @$ u$ kbe strong, as in-migration and job creation continues to attract people from not" n! ], T# \5 p9 B K' S. Y
only across Canada, but from around the world. Our average wages are
3 e- r$ c" d s& e0 K; ]increasing, our population is increasing, our unemployment rate continues to1 V+ A& C% v. P6 K ^$ {; ~; C
drop 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
, L$ w6 r8 D' ^fundamentals:
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* `% z) U3 m; e9 d1. The Conference Board of Canada is forecasting strong economic growth in
0 Q3 Z) i" J$ f- g* t2 YCanada, with Alberta once again leading the way. In fact, the projected growth; k: a4 I/ X* s! G
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
. {! ~ u2 O$ l& R8 ~) L( A/ S# A( x8 Tthis is slated to occur even with the labour shortages we are witnessing.7 d# p' O K3 V
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2. People are discovering Canada as an investment center from all over the9 A* h8 `% a; |* M7 V2 L, s6 l
world. Recently, there have been investors coming here from Asia, Australia,3 R' L: w$ m; R1 r0 L* H
the US, UK and Europe. In fact, if you review the world's press you will see% K! ]5 Y; }+ q+ ~& |5 {
that Canada (with a focus on Alberta) is being discussed more frequently. & Y1 {* j T! q/ A1 y( ^; @
6 k) v; ^4 z* K% ]: _3. Don Campbell has just returned from presenting our Canadian investment
- A. s: Q3 f& {/ jatmosphere (including Why Alberta - Why Now") to a group of major investors in9 R- c$ V0 z7 U7 [) ^- d+ M
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after9 h0 s+ q. d# t6 c9 |1 ^, f( m
Don presented the economic facts, many of these investors (who could invest! Q' e- W) P4 t6 d# j/ N A& Y% u
anywhere in the world) have already booked their flights to here. Once again
& z: y/ Q8 G; n- Pproving that when the true numbers of our economy are presented (along with the
( }+ }: N2 R- d7 b* ?( cpolitical stability of our country), there is no place in the world that can
) |: B7 R$ G) c; d+ n+ \beat it for long term investment.
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& @3 X2 Q8 [. K* s/ z$ x4. Job creation continues to be strong (with a small lull in June); definitely" ^, f1 d5 ]' y5 g8 s
a sign of strong long-term fundamentals. RBC has also been following the job7 w/ O# Z2 Z* J; r1 S
creation situation and here is what they are saying: (www.rbc.com/economics)$ B, M; H1 V1 m+ w
"After generating a substantial 96,700 jobs in May, the largest such gain since
/ y( r5 w0 D* s, OJanuary 2002, the economy lost a modest 4,600 jobs in June...
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# P( c$ T4 X ?% K& Z5 zStrength in the Canadian economy contributed to a gain of 215,600 jobs in the9 a+ O& j, I6 U J3 a
first half of 2006, a feat not matched since the second half of 2002. With the3 v$ a5 {7 @% k* w6 T4 \# F- N; @
economy widely expected to grow at a more moderate pace in the second half of7 | J2 I$ }# r, R ~
the year on the back of slowing trade activity, this impressive showing may not
# w, W* [$ ^7 |, f: o0 i8 Yrepeat itself. We expect that employment grew in July at a pace consistent with
0 b2 w* q% b5 ~4 u) Pits recent trend of 24,000 jobs a month. Assuming that the labour force grew at1 J7 [. T7 ]2 ]( s8 a
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate6 ]( z+ d9 }7 q7 x( g" X! ]
of 6.1%." Overall very good news. Now the key is to ensure that the region in! _- w: e. _. ^& ]$ J4 x( u
which you are investing is continuing to generate jobs and increasing incomes.
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: v4 y! ~7 e. ]) TIn other words, it is a great time to be taking advantage of this strong% l$ k* I% c& h. T0 F* N
economy, avoiding 'excuses' and to especially not listen to the uninformed! s! F- b9 M9 b. G6 L% w
'dream stealers.' As long as you stick with your game plan, you continue to do
) W$ q: ?- a' x0 e! `7 }7 E2 jyour due diligence, and you remove emotions from the equation, you will see the5 H3 Y/ u3 b& V
opportunities that are right in front of you, right here in Alberta. Let the! V! r* a. Q5 U) w- l
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared
1 [/ z5 y3 v( ~& N9 K7 `; E# T$ Eand your financial freedom has surpassed even your wildest expectations.
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4 C7 Y+ k- _0 P9 c- g' {Capital Gains Comparison.
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' l- C( q$ c9 I5 _" B% ^$ KKPMG has recently released a comparison of the true Top Federal and Provincial+ t6 E( A/ J1 l, L( z
Marginal Capital Gains Tax Rates per province. It is very interesting to see
' H( k$ P2 @. [0 d. Q+ nhow these will affect your exit strategy. Here are the numbers:) i* i6 c: g8 S4 }0 V/ R% l3 p: v
. l. H! b- D* D8 [6 N) _0 }; T0 BBC . . . . . . . . 21.9%0 t4 w9 t/ y( ?8 \ f% W
AB . . . . . . . . 19.5%
9 @' `4 }" U- ?0 r: ]SK . . . . . . . . 22.0%
8 Q4 p, X! v4 rMB . . . . . . . . 23.2%, G) I4 I) W$ \- u
ON . . . . . . . . 23.2%
4 d C/ \- B3 HQC . . . . . . . . 24.1%
4 Q- h0 N! B8 W" PNB . . . . . . . . 23.4%
! r* M$ i" \7 NNS . . . . . . . . 24.1%
+ v a* Y3 z6 r; k EPE . . . . . . . . 23.7%
v9 ?4 w) t1 {$ z, {' t* D7 KNF . . . . . . . . 24.3%) R T4 o9 m( q+ J
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Lower capital gains tax increases investment and stimulates the long term& u6 F( _+ t& i2 Z# N& G
economy of the province. It also allows real estate investors to keep more of
8 K" w1 ~, H% D+ Ttheir profits at exit time. Always a good number to pay attention to., d& b# L/ i4 v$ [* |+ f' d# [
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Overall, by staying focused for the next short period of time, you have the
; H# w! u$ I7 d' \! ^% zopportunity to create financial freedom of which others can only dream. Of; P/ N4 U0 I% X" S
course, the key word is focus. And with an August line-up of 'Members Only'
5 A y+ a( P9 u/ M, ^3 kevents like this, you can't help to become a real estate investment champion. m' M' y& s: H3 Y3 f0 Z5 A/ g
when you take action as a full REIN Member.
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4 O1 j! P r$ ^6 F5 p, `; EFocus on the fundamentals, keep emotions out of your decisions, and enjoy the& W' G' E2 N. C, [1 t
results in just a few short years. |
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发表于 2006-8-25 08:35
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