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NEW HOUSING PRICE INDEX...# } |% K" Q9 l5 |" Z
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" z9 A7 |# [3 [8 _The New Housing Price Index, has just been released and it provides some very
* t) ]! r- W# E& X! u$ c# ^interesting insights, not only into where the market has moved, but where it
" e6 R3 [/ {8 K5 l) B- w( J, p- lwill be going.
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+ z) [1 c U1 U' }+ ?# lIt proved, once again, the value of looking at fundamentals behind a market.
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' D1 u9 Y3 B B7 \% {) OThe New Housing Price Index is compiled by Statistics Canada and is used by
2 l4 M6 H, k0 v3 N R& isophisticated investors to see how much the market has moved, as well as an
3 F" q/ w7 ~2 [( K2 z+ O; I6 D% xindicator of where re-sale home prices will be moving in the coming six months.
. Z) C4 j7 i+ m! t+ }& WWe look at the ripple effect that new housing prices have on re-sale property5 y; u0 f( r" y% G
values and can extrapolate what direction re-sale prices will be moving and by. b* A3 C) o% b( ` h
how much.
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For instance, for the last three years, we have told investors to avoid Windsor,
6 S0 J7 x" r8 ~8 Q, K, uOntario as an investment area because the underlying fundamentals are not very
. i3 _, `1 p: Jstrong. This has been proven once again with the release of the latest O9 s& u- e" a' J: T
findings. New Housing Prices have actually decreased by .5% during June 2005 -& `$ r% t: h4 o7 R1 W
June 2006 proving that fundamental investing works in helping you pick the best& s `1 Q' p7 y/ P0 P
markets and avoid the flat ones. This .5% decrease should have little impact
* e7 h" f2 Z1 J# d2 Con 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
+ v& _' N0 @% Emarket continues to be super heated. With close to 3,000 net new people into$ `* e% b+ T9 @6 p& ~! I
the city every month, the property market just can't keep up. That is why we3 e i* \& |6 K, R$ v( [/ r
saw the New Housing Price Index increase by 49.2% (June 2005 to June 2006). 4 f* O( j7 b& P- O1 ]8 D
This is great news for the future of re-sale values in the city as these
, T/ o6 t; f) O+ u) J( i3 uincreases will continue to ripple out into the market for at least the next six; S K) P6 J; x
months.
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Comparing these two regions is a great illustration of the value of not getting
$ G8 m! O! ~" m* _" c0 acaught in the 'emotional guessing game' by just focusing on the underlying" J. y: }% I7 @. i$ ^: ~+ K( T
fundamentals. It is sad to see those people who said in the last 2 years that0 ^: W9 u4 {* f; N* o
the Alberta real estate market was over and they were going to sit back and wait, A+ X- Y5 o0 F& k' ]# d3 \& a7 L
until it drops. Quite obviously, they have missed out on AMAZING gains, all
! L; W/ G, B5 Y* y2 z& _6 \because they didn't follow fundamentals, they just led with their emotions.1 L* F/ m, `+ ?+ N! e7 R
& b4 t, O" M% R$ XBy the way, Edmonton's New Housing Price Index is up an amazing 28% so far (June# c, z6 s5 ]6 m5 U" I' F/ ?
2005 to June 2006), also great news.. {' [% p* k. U1 ^* k" O
/ I1 e* j, T3 ]& C& DBy comparison across the country, these are the numbers for June 2005 - June
, @7 O4 }4 S8 ?: `5 o% M$ T0 d% ]8 `" Y2006 New Housing Price Index for:
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* n5 P8 ? H9 l1 PVancouver . . . . . . . . +5.2% `6 z6 w7 `5 ~$ _# s
Saskatoon . . . . . . . . +8.5%
5 b, m& C2 S1 A& E! mLondon . . . . . . . . . . . +3.0%
( e$ o* y r9 e1 f3 c0 c7 BHamilton . . . . . . . . . . +4.9%! J: U; Z& M, H2 Y1 v2 U
St. Catharines - Niagara . . . . +4.9%" X& K. F m/ _1 f0 V2 M" H
Toronto and Oshawa . . . . . . . +3.27 F- O( l" z/ t9 N- Q0 u+ z; Y$ j
Ottawa - Gatineau . . . . . . . . . +3.1%9 [; f7 P7 M) v
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Fundamental investing ALWAYS makes you look like a genius - emotional investing
. k1 {0 Q5 m+ g. w' E6 Vgives you quick highs, but also quick lows. Well done on your focus!5 [8 I$ p* Z9 s
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As the fundamentals have been showing all along, the Alberta market continues to& ?' q A% p z/ f& V% |% q
be strong, as in-migration and job creation continues to attract people from not
% O: W1 ?+ S7 t g+ Z8 o( Aonly across Canada, but from around the world. Our average wages are/ \4 M+ e% ~; Z8 w, o2 M
increasing, our population is increasing, our unemployment rate continues to+ U1 D4 }5 ?, e) E% m3 y
drop and our GDP growth is slated to once again lead the country.1 l, Y; a" l5 O
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Here are some very interesting facts that are helping to support the strong, B( @1 |* M- }4 d6 |: Q
fundamentals:
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- _- [ Q' \. y6 w9 t1. The Conference Board of Canada is forecasting strong economic growth in9 M& z. @2 T* f. [, o: ^
Canada, with Alberta once again leading the way. In fact, the projected growth
; c+ K/ c J( E' {( W6 rfor Alberta's economy is a staggering 6.6%. (BC + 3.6%, Ontario + 2.5%), and" c& A: B; O# H5 D1 G0 R, o
this is slated to occur even with the labour shortages we are witnessing.4 ]; |0 }1 a, ^7 H( ^
: }# ]6 ^/ J8 p: @2. People are discovering Canada as an investment center from all over the8 z) o3 e5 u$ r* y5 {* y
world. Recently, there have been investors coming here from Asia, Australia, N: m. x: a! i( ?6 b
the US, UK and Europe. In fact, if you review the world's press you will see% s& m; O3 z/ x, _; g; C! Z
that Canada (with a focus on Alberta) is being discussed more frequently. 1 L: Z1 H V1 @- e! }( Q
: F: K" j* A4 x$ A. B, ?$ |3. Don Campbell has just returned from presenting our Canadian investment5 Y" e+ ?0 E6 m( X- M8 W
atmosphere (including Why Alberta - Why Now") to a group of major investors in
4 |, [. b# T5 e+ E# `6 P pDublin, Ireland, and the response was overwhelmingly positive. In fact, after \9 Y# [% o& ^: y% L
Don presented the economic facts, many of these investors (who could invest3 M8 g* f! j0 Y- o9 h
anywhere in the world) have already booked their flights to here. Once again
$ E2 L! C6 Z) O3 S/ H$ {. `# xproving that when the true numbers of our economy are presented (along with the
9 w. _4 _- S% cpolitical stability of our country), there is no place in the world that can0 K2 k+ e4 {9 m
beat it for long term investment.
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4. Job creation continues to be strong (with a small lull in June); definitely
: v( s' m4 r/ L0 q) p1 O& \/ Q( Oa sign of strong long-term fundamentals. RBC has also been following the job
5 |( ?2 L( i; ]; `# B2 xcreation situation and here is what they are saying: (www.rbc.com/economics)
8 j+ d( V' H2 }7 O' j3 S- |5 P"After generating a substantial 96,700 jobs in May, the largest such gain since
: O. n) n; w6 o6 J7 P7 IJanuary 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 K3 ^$ P7 k/ c: ^2 M, O
first half of 2006, a feat not matched since the second half of 2002. With the
; y4 ?8 I. ~# `/ I9 Eeconomy widely expected to grow at a more moderate pace in the second half of
: Q. }1 }4 c+ w! W/ kthe year on the back of slowing trade activity, this impressive showing may not
& t/ X5 x; X2 k6 r. Nrepeat itself. We expect that employment grew in July at a pace consistent with
y( t3 }( s% ?4 K2 Vits recent trend of 24,000 jobs a month. Assuming that the labour force grew at* D# o+ H- [* t; N! h
its trend rate, a gain of 24,000 jobs will lead to a national unemployment rate
4 r2 _5 w( X. W% jof 6.1%." Overall very good news. Now the key is to ensure that the region in
( {6 `! B5 y% j* `which you are investing is continuing to generate jobs and increasing incomes.
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/ F2 o/ K f/ V$ M6 L% LIn other words, it is a great time to be taking advantage of this strong) ]7 f: d+ y! ]5 ?
economy, avoiding 'excuses' and to especially not listen to the uninformed1 ^ R( R6 m' |1 [# l
'dream stealers.' As long as you stick with your game plan, you continue to do8 V/ l$ l7 I3 y: U( g
your due diligence, and you remove emotions from the equation, you will see the
3 b9 W- I" ?. U; |$ H# n" _opportunities that are right in front of you, right here in Alberta. Let the
! O; Z# I( s e. K/ V1 u'dream stealers' call you 'lucky' 5 years from now as your net worth has soared* s" D3 n( K% I0 B# e
and your financial freedom has surpassed even your wildest expectations.
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Capital Gains Comparison. B% h! t. X& P+ j8 H$ r
, D, T3 _6 J3 @; T+ j2 vKPMG has recently released a comparison of the true Top Federal and Provincial
' V$ f! Y9 `6 B, p& k0 T( ]Marginal Capital Gains Tax Rates per province. It is very interesting to see
6 t+ U' T6 w thow these will affect your exit strategy. Here are the numbers:$ T x3 H& ^8 V% h
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BC . . . . . . . . 21.9%
% B7 I8 q) @3 W1 rAB . . . . . . . . 19.5%
- ^; h; z9 \2 \2 d8 }6 W- c4 XSK . . . . . . . . 22.0% L/ l6 x8 O' L3 }% D0 V2 S. S
MB . . . . . . . . 23.2%/ {& Q$ _% L8 w* c0 C; X2 H3 |
ON . . . . . . . . 23.2%
0 y$ |1 ^3 X' e; T; ~QC . . . . . . . . 24.1%
- {5 n# l, ^, `0 q$ r: }* k* I) M, wNB . . . . . . . . 23.4%, W' l5 M( b' Z- q# ]% j7 W1 ]
NS . . . . . . . . 24.1%! N4 F3 } ~4 G" H3 O* G
PE . . . . . . . . 23.7%5 s* S: ^2 U2 F6 F1 h% s
NF . . . . . . . . 24.3%
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Lower capital gains tax increases investment and stimulates the long term
% z. \3 y$ y2 j5 A1 W$ t& Beconomy of the province. It also allows real estate investors to keep more of9 V# n# W$ Z6 U) P+ Q$ N4 R/ I
their 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) h/ @: o S4 Y+ {
opportunity to create financial freedom of which others can only dream. Of
9 Q& ]$ B7 P' S. k+ scourse, the key word is focus. And with an August line-up of 'Members Only'' Z Y+ _* F9 J
events like this, you can't help to become a real estate investment champion4 p, Z$ h) e2 F
when 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
' T" L) \! X5 Jresults in just a few short years. |
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