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NEW HOUSING PRICE INDEX...6 u6 L# J8 \ d9 {4 }" V$ d) K
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4 R$ F: H0 q7 Y/ l" @# u& AThe New Housing Price Index, has just been released and it provides some very
2 \, j! P4 ~) o+ H8 O, l: I2 {8 B3 Ninteresting insights, not only into where the market has moved, but where it
( j% c* ~% L/ f8 p+ I: zwill be going.
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- j/ ]4 o4 O- A y+ JIt proved, once again, the value of looking at fundamentals behind a market.* f6 ] v* P, {7 _
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The New Housing Price Index is compiled by Statistics Canada and is used by" v) N( L9 [5 L; @, Y x& B
sophisticated investors to see how much the market has moved, as well as an
: ^. Z* T9 q7 b" R7 ]7 X9 G/ Hindicator of where re-sale home prices will be moving in the coming six months. 5 _: C! H2 y# j. ^
We look at the ripple effect that new housing prices have on re-sale property
% ?+ \+ f/ r- m; P$ Svalues and can extrapolate what direction re-sale prices will be moving and by
/ n/ C$ I T; k# E9 [$ [how much.
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For instance, for the last three years, we have told investors to avoid Windsor,& G- V4 n! m8 [! [: h2 S& `+ s
Ontario as an investment area because the underlying fundamentals are not very( ^* \, d" r( o9 J$ w9 K L! c
strong. This has been proven once again with the release of the latest
2 y2 I9 c) ^/ j+ a$ k9 dfindings. New Housing Prices have actually decreased by .5% during June 2005 -8 c4 V* v4 v0 A5 `
June 2006 proving that fundamental investing works in helping you pick the best) A1 c; J- c+ t5 b3 W
markets and avoid the flat ones. This .5% decrease should have little impact
2 W$ n. k O1 h4 Y; N9 zon average re-sale values in the Windsor region.
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( I% Q+ s, ^$ G6 ?/ U6 \2 \To contrast this, the fundamentals we discuss are so strong in Calgary that the
" j! R$ `/ O/ Q- f" |7 Qmarket continues to be super heated. With close to 3,000 net new people into
6 K! E5 k& W4 v5 e9 pthe city every month, the property market just can't keep up. That is why we
; E% [; G( C6 C, h$ Bsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
8 N3 V! `" {' O% o3 h) b5 CThis is great news for the future of re-sale values in the city as these
# z3 |% t: `7 }9 H6 j" ^; a& k2 t) p( Oincreases will continue to ripple out into the market for at least the next six
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4 m. u, F4 e0 v( [Comparing these two regions is a great illustration of the value of not getting: r, }+ o/ a4 o3 i4 I) s" U' Z
caught in the 'emotional guessing game' by just focusing on the underlying
4 y* C: Q5 z p/ S9 {! f' L Hfundamentals. It is sad to see those people who said in the last 2 years that
0 x( l, _5 ]* j$ Z& [2 ythe Alberta real estate market was over and they were going to sit back and wait" \7 f, k) y0 t( H
until it drops. Quite obviously, they have missed out on AMAZING gains, all. {$ l: B) X# l" S; b* k B2 e
because they didn't follow fundamentals, they just led with their emotions. D0 h2 c8 g( x1 N' N5 w
! r! A- m) ^, F. X) IBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June
! ]3 x9 m" w1 r4 ?! l2005 to June 2006), also great news.' e7 d& i9 e, C0 ]% K- O6 C$ ]' V5 S
/ `& m+ r1 l6 a+ IBy comparison across the country, these are the numbers for June 2005 - June
0 q" D/ A. C) G2006 New Housing Price Index for:+ G+ e! L, c" m: r2 o
9 F; Y+ R) G- d' c( hVancouver . . . . . . . . +5.2%
: L$ c, Y6 ^6 T3 ^Saskatoon . . . . . . . . +8.5%& w; n2 R# H. R4 m: D9 [& F7 A0 ?
London . . . . . . . . . . . +3.0%; ~. u1 c+ `9 p4 j
Hamilton . . . . . . . . . . +4.9%
8 q9 O/ w( X& P" [8 FSt. Catharines - Niagara . . . . +4.9% C5 n0 ^# D9 R' T9 |4 |# q7 \
Toronto and Oshawa . . . . . . . +3.2- t% D3 w6 P) R7 E0 D, u4 m
Ottawa - Gatineau . . . . . . . . . +3.1%( U4 |' M5 q6 F
; ^" Q: n4 G4 g) }" C V. M9 j, cFundamental investing ALWAYS makes you look like a genius - emotional investing+ m$ C% m% E0 e. E* a# L
gives you quick highs, but also quick lows. Well done on your focus!& @4 k. B# v$ l: O" }: b+ o* ^
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As the fundamentals have been showing all along, the Alberta market continues to& f4 N# Y0 T" W# M6 M
be strong, as in-migration and job creation continues to attract people from not
! F, ^1 A& A ]only across Canada, but from around the world. Our average wages are
: V1 d( }: F: c: nincreasing, our population is increasing, our unemployment rate continues to
1 W) Y+ o* R0 A# J* w/ Bdrop and our GDP growth is slated to once again lead the country.6 O7 u/ I) N8 }+ q2 `- H
6 b% }2 a, C+ m- H; z) _9 E/ FHere are some very interesting facts that are helping to support the strong
2 B% N' P# l. g7 |* O2 gfundamentals:
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- E% l# G2 w; q0 O8 }+ S1. The Conference Board of Canada is forecasting strong economic growth in
# b L9 C6 `! l/ R* JCanada, with Alberta once again leading the way. In fact, the projected growth
$ I2 P `2 O8 q, F' I' g; Q* Qfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and" O8 W9 ~9 A3 x: D# K
this is slated to occur even with the labour shortages we are witnessing.
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$ L z+ Z" E: _. u; L1 l2. People are discovering Canada as an investment center from all over the
v4 f' W, T5 z2 j6 Lworld. Recently, there have been investors coming here from Asia, Australia,
8 l5 ?; t2 _1 pthe US, UK and Europe. In fact, if you review the world's press you will see
( B$ |7 X0 K1 g3 X1 z! s$ V5 othat Canada (with a focus on Alberta) is being discussed more frequently.
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) j; h* }$ \2 O; D! |3 ^3. Don Campbell has just returned from presenting our Canadian investment
* C* U2 M( u5 G2 o# uatmosphere (including Why Alberta - Why Now") to a group of major investors in! F: Y! K3 j0 B, }
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after9 x7 N" D: n8 m9 I" g
Don presented the economic facts, many of these investors (who could invest' `4 w! |6 f8 J( @( M% k$ I
anywhere in the world) have already booked their flights to here. Once again
% J( Y- K. f) G4 Rproving that when the true numbers of our economy are presented (along with the
6 X# r' x' S+ g' }5 ?3 R& Fpolitical stability of our country), there is no place in the world that can
, u1 D! j) n5 e* n' k; \. lbeat it for long term investment.
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) J3 F, m* J/ G# m# A3 `& }. `! f4. Job creation continues to be strong (with a small lull in June); definitely3 _) c; B' A& ?- e) L8 Y# Z/ E' a9 ~
a sign of strong long-term fundamentals. RBC has also been following the job
# T s( t3 M* g2 r" L- q4 qcreation situation and here is what they are saying: (www.rbc.com/economics)
4 P b; J/ M. V2 N5 ]9 |"After generating a substantial 96,700 jobs in May, the largest such gain since; W' [2 E- t- `$ O9 G! r" \1 ^
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/ G. ?6 b9 O0 H a
first half of 2006, a feat not matched since the second half of 2002. With the
5 M# `1 H2 y' @" X! X" ~economy widely expected to grow at a more moderate pace in the second half of3 R7 f0 ?0 `7 t6 p6 \" K
the year on the back of slowing trade activity, this impressive showing may not" b( Z& M2 z9 |5 v% M
repeat itself. We expect that employment grew in July at a pace consistent with c* Q0 l2 z( U( C" w1 A" _
its recent trend of 24,000 jobs a month. Assuming that the labour force grew at! S/ K( _3 \9 ^% i
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
( @( B5 i6 U! Yof 6.1%." Overall very good news. Now the key is to ensure that the region in9 w: t4 q! z; p# I$ ]
which you are investing is continuing to generate jobs and increasing incomes.4 n9 v2 b1 _7 M& s
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In other words, it is a great time to be taking advantage of this strong3 Y( I# o3 b2 V# a
economy, avoiding 'excuses' and to especially not listen to the uninformed1 Q, D9 V. A, z$ o; D0 ?# C
'dream stealers.' As long as you stick with your game plan, you continue to do
6 F# R6 @0 \. C( {3 V7 c1 ]& ]1 |* Myour due diligence, and you remove emotions from the equation, you will see the
6 _1 H, z4 Q3 E) j, z% {opportunities that are right in front of you, right here in Alberta. Let the* ]6 n" @, ~4 }: k$ f1 \
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared1 r' h+ |& ?7 \: d; i
and your financial freedom has surpassed even your wildest expectations.! u9 \6 N, q. k" h. o8 Z4 q) x, A2 M7 ?
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Capital Gains Comparison.: h/ G* D+ E0 \4 v7 e
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KPMG has recently released a comparison of the true Top Federal and Provincial
' A5 M; c$ \& w& A- q0 U. |- lMarginal Capital Gains Tax Rates per province. It is very interesting to see& F+ N+ U2 h) I
how these will affect your exit strategy. Here are the numbers:
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BC . . . . . . . . 21.9%3 h7 J6 g; O- v7 l6 o
AB . . . . . . . . 19.5%
! K! @. j, g9 n$ xSK . . . . . . . . 22.0%
# D# L, G& o$ J% L5 ]MB . . . . . . . . 23.2%9 {& c' A; V8 x4 E
ON . . . . . . . . 23.2%1 B! e2 P; N/ S
QC . . . . . . . . 24.1%' [) z7 z2 A0 r& `& Z. m, T
NB . . . . . . . . 23.4%; T4 i: l, Z# V M6 N
NS . . . . . . . . 24.1%
: T( e u8 Q4 S, b. PPE . . . . . . . . 23.7%! S( D3 U: ^! y1 {( l$ N3 a
NF . . . . . . . . 24.3%- K( s( |8 i% y; b: Z
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Lower capital gains tax increases investment and stimulates the long term
4 M$ A) @& C; x4 B1 feconomy of the province. It also allows real estate investors to keep more of
% F7 Q) H9 f& l7 ?3 d0 }their profits at exit time. Always a good number to pay attention to.
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8 |, _( [2 b0 W# m8 q* @) \Overall, by staying focused for the next short period of time, you have the
4 C. k R% C) s1 H/ Xopportunity to create financial freedom of which others can only dream. Of7 [6 T" e! {1 A# e7 O
course, the key word is focus. And with an August line-up of 'Members Only'* V+ b; q5 S7 P: b9 e/ E0 K. S
events like this, you can't help to become a real estate investment champion
# ~, K) D/ @3 i; R9 D. O. 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
( ^" G1 d' e% W% Yresults in just a few short years. |
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发表于 2006-8-25 08:35
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