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NEW HOUSING PRICE INDEX...0 K \( p; ]; G9 u% T* n j/ [0 D
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The New Housing Price Index, has just been released and it provides some very9 _( X: D* P; j) i) x
interesting insights, not only into where the market has moved, but where it
8 p; b3 E5 [' L% s6 Y9 nwill be going.
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It proved, once again, the value of looking at fundamentals behind a market.
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0 U6 {* k* g* \8 U! c9 I$ _+ dThe New Housing Price Index is compiled by Statistics Canada and is used by
`; P; c7 j. usophisticated investors to see how much the market has moved, as well as an4 L' V& `) I A" E5 [
indicator of where re-sale home prices will be moving in the coming six months.
- d2 e. `( R1 h4 n9 N7 \We look at the ripple effect that new housing prices have on re-sale property
" e* {6 |! K* V# o* M7 cvalues and can extrapolate what direction re-sale prices will be moving and by
1 v" G0 C4 i7 p) X) Thow much.3 T( E, X- W1 j
1 m$ b' b4 D3 G; C" V7 T1 L/ Z( rFor instance, for the last three years, we have told investors to avoid Windsor,) K) P, {) J5 M- a. n4 v: ^2 l
Ontario as an investment area because the underlying fundamentals are not very
( A: r' Z0 s5 G/ H& C7 ~strong. This has been proven once again with the release of the latest# d- a0 R4 W1 \, Y, _% ~, m
findings. New Housing Prices have actually decreased by .5% during June 2005 -) ~1 e t' S( v1 N' `
June 2006 proving that fundamental investing works in helping you pick the best
! h' \/ _5 `5 Y+ B5 |! rmarkets and avoid the flat ones. This .5% decrease should have little impact
7 y, Y) N; w% `0 X9 K2 L/ `) b& don 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 the
9 v2 A" t8 c* A; _market continues to be super heated. With close to 3,000 net new people into
/ H0 q1 m5 v2 s$ ^ I7 j" x' A2 _the city every month, the property market just can't keep up. That is why we
- X ~. b6 i( r' f" g8 F+ Lsaw the New Housing Price Index increase by 49.2% (June 2005 to June 2006).
, E' R9 X* ~5 \ ^; k6 pThis is great news for the future of re-sale values in the city as these! y, g: b/ c/ F3 ^0 A3 G1 T
increases will continue to ripple out into the market for at least the next six
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Comparing these two regions is a great illustration of the value of not getting$ [: O- M4 t, ]0 ]# g3 u+ D [
caught in the 'emotional guessing game' by just focusing on the underlying
+ O" s( { ?3 P* f$ f2 Z$ `fundamentals. It is sad to see those people who said in the last 2 years that; ]- f, X( O1 w4 n
the Alberta real estate market was over and they were going to sit back and wait
) [3 h% u) C- v. Q4 |) d. Muntil it drops. Quite obviously, they have missed out on AMAZING gains, all: A$ Y3 z% o. W! v9 g1 Z' v
because they didn't follow fundamentals, they just led with their emotions.7 a6 o* }3 e1 k r' s) |
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By the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June9 l+ k9 k7 }1 J; C# h4 @3 ~) B# f
2005 to June 2006), also great news./ q# d% p( A- S1 K3 |4 w( k
& ~# B5 A3 ]2 ZBy comparison across the country, these are the numbers for June 2005 - June
. B6 a' W" K+ l/ ?2006 New Housing Price Index for:
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- {+ Z" Z, S, ?# L' t$ HVancouver . . . . . . . . +5.2%! _" |7 r. }+ R5 q3 b5 o3 \0 P: l
Saskatoon . . . . . . . . +8.5%
6 ^+ O# ~' r" D- E9 r+ w- dLondon . . . . . . . . . . . +3.0% N! C% O3 w0 E& M
Hamilton . . . . . . . . . . +4.9%0 i& I5 W' q) n- T" P
St. Catharines - Niagara . . . . +4.9%& k' c6 w# ~* |1 S( L! c: n4 D
Toronto and Oshawa . . . . . . . +3.2
1 {( O8 V' y# f6 d( A4 Q+ A1 @% ]! POttawa - Gatineau . . . . . . . . . +3.1%
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% v/ t1 p: e" v" {: ?Fundamental investing ALWAYS makes you look like a genius - emotional investing
% v L7 b5 ~) i4 y8 Ygives you quick highs, but also quick lows. Well done on your focus!. M+ O7 Z3 }0 T; n. A: `- J2 U2 \
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As the fundamentals have been showing all along, the Alberta market continues to
{$ `, e* U2 O+ ]. x" ~be strong, as in-migration and job creation continues to attract people from not
2 e7 V9 h* r F$ v* A5 s- b0 }only across Canada, but from around the world. Our average wages are( O( V. J( n) l
increasing, our population is increasing, our unemployment rate continues to
# |) b2 V& v* Q H2 adrop and our GDP growth is slated to once again lead the country.! T7 j" h* E5 G' l) A
& k; z2 k- k' EHere are some very interesting facts that are helping to support the strong% Z9 t% s% J4 j( e' F: S h0 y
fundamentals:
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1. The Conference Board of Canada is forecasting strong economic growth in `& |3 K0 g3 V
Canada, with Alberta once again leading the way. In fact, the projected growth5 E' ` N3 i: t0 L
for Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and
- E5 k! j- _+ c! Pthis is slated to occur even with the labour shortages we are witnessing.
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2. People are discovering Canada as an investment center from all over the6 M# W2 a O6 ^: m) c# n
world. Recently, there have been investors coming here from Asia, Australia,
1 [7 L- t7 m0 Z9 nthe US, UK and Europe. In fact, if you review the world's press you will see6 {9 O9 ?& B$ }3 B! n
that Canada (with a focus on Alberta) is being discussed more frequently. - s5 M1 E4 m( j- M2 v0 @$ G1 O
/ u' I& o1 h A, O/ y3. Don Campbell has just returned from presenting our Canadian investment
8 g0 ?1 r4 }" C# [( E8 g2 v% Aatmosphere (including Why Alberta - Why Now") to a group of major investors in* D& P+ \8 a+ Z* C2 u) w( h/ e
Dublin, Ireland, and the response was overwhelmingly positive. In fact, after
; F! A' y# `# f) {5 G$ WDon presented the economic facts, many of these investors (who could invest) S" g( I Z1 w
anywhere in the world) have already booked their flights to here. Once again! ~) U9 z' T" G! w; e- P. H" n' M2 U
proving that when the true numbers of our economy are presented (along with the
1 L+ j6 E( e y' S/ l1 |' p' Xpolitical stability of our country), there is no place in the world that can
: G9 O* i0 n" k4 u- d& j' xbeat it for long term investment.
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" |$ \ Z* {+ R4. Job creation continues to be strong (with a small lull in June); definitely
. ?7 V3 T8 J! J4 @/ b. oa sign of strong long-term fundamentals. RBC has also been following the job
' f: c& I8 M5 l2 ?) Ucreation situation and here is what they are saying: (www.rbc.com/economics)6 J4 B2 i% n% s
"After generating a substantial 96,700 jobs in May, the largest such gain since! z- L* u+ I5 ?$ t! q5 |
January 2002, the economy lost a modest 4,600 jobs in June...
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9 @) \3 U* K3 D+ _( e( q6 xStrength in the Canadian economy contributed to a gain of 215,600 jobs in the/ ?) R( E4 O% F" {
first half of 2006, a feat not matched since the second half of 2002. With the
+ X# o9 k/ {/ Y l7 Qeconomy widely expected to grow at a more moderate pace in the second half of5 C- B( u8 |2 A4 ~" t& E- `% V$ M
the year on the back of slowing trade activity, this impressive showing may not
5 n8 F& X8 d' W }! crepeat itself. We expect that employment grew in July at a pace consistent with
* ~ ]* H) Q* Y7 `its recent trend of 24,000 jobs a month. Assuming that the labour force grew at9 u# D# u6 ?9 y, F) y
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate7 Z: p9 M: M p% r6 [
of 6.1%." Overall very good news. Now the key is to ensure that the region in; B; v6 C. j1 @' I) D. g9 Y }0 q5 P
which you are investing is continuing to generate jobs and increasing incomes.
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* ~$ ?6 U$ X0 N- r, u7 |* hIn other words, it is a great time to be taking advantage of this strong) m3 x7 S) N* t0 q/ w
economy, avoiding 'excuses' and to especially not listen to the uninformed
3 V z9 o: M+ @'dream stealers.' As long as you stick with your game plan, you continue to do
$ E# [% P7 G. k8 X" ~* H7 W1 ryour due diligence, and you remove emotions from the equation, you will see the' D7 A% b/ _, l
opportunities that are right in front of you, right here in Alberta. Let the4 Y4 g# _' a0 ^9 V; O, y$ x
'dream stealers' call you 'lucky' 5 years from now as your net worth has soared( g9 S) w" ~. ? c! w2 e7 {+ g% }
and your financial freedom has surpassed even your wildest expectations.! K3 Z. P/ G/ ^
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Capital Gains Comparison.
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KPMG has recently released a comparison of the true Top Federal and Provincial
0 c- A9 d% U' V$ d; zMarginal Capital Gains Tax Rates per province. It is very interesting to see
( s& M8 Z% m( O4 B$ ^; phow these will affect your exit strategy. Here are the numbers:3 O, U) l0 i/ w
6 H9 B- m& ^" \; M. g' Q) j6 EBC . . . . . . . . 21.9%" E8 p6 N/ J% t) @; x+ m
AB . . . . . . . . 19.5%
Q( a+ d- _! C" y3 FSK . . . . . . . . 22.0%4 j* E; w5 I5 E$ Z$ i2 K
MB . . . . . . . . 23.2%! J* C5 v* X6 E& a n* d
ON . . . . . . . . 23.2%
. i9 \$ A1 U0 { c- B8 DQC . . . . . . . . 24.1%& G& X: p. n& P4 G5 t
NB . . . . . . . . 23.4%0 c1 V+ k Q3 u! `
NS . . . . . . . . 24.1%- S6 Q; c' J- {( Y6 o
PE . . . . . . . . 23.7%8 F! l( W! C, p( D
NF . . . . . . . . 24.3%# l* h- L( U" a- R8 ?
7 ~! I) l/ C. H# c- I8 p& ~ rLower capital gains tax increases investment and stimulates the long term2 C X4 d' X* A+ ?- p9 A
economy of the province. It also allows real estate investors to keep more of
/ h! U6 I) s' I2 Y, v9 Qtheir profits at exit time. Always a good number to pay attention to.
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5 V% `4 K7 \) K6 s! ^+ bOverall, by staying focused for the next short period of time, you have the( z0 _7 x y" L8 Z% M5 q/ Z
opportunity to create financial freedom of which others can only dream. Of- U( t! }0 f' L7 B- q
course, the key word is focus. And with an August line-up of 'Members Only'/ I- A. A& S! T/ n: {: J
events like this, you can't help to become a real estate investment champion3 J6 t9 b( m) Z$ M$ J
when you take action as a full REIN Member. p2 u3 m9 Q) C" R' p$ ?" ~5 U" T
g B- A& P; q, u" U& R; nFocus on the fundamentals, keep emotions out of your decisions, and enjoy the% [. O, G" r+ G. u4 |# P1 ~
results in just a few short years. |
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发表于 2006-8-25 08:35
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