This Newsletter Issue Includes...
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Where Are the Canadian Mortgage Rates Going?
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Canadian Hourly Wage Updates
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Mortgage Fraud
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Habitat for Humanity- Women’s Build
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Unprecedented Action
Congratulations
Before we get to ALL the details in the newsletter, we wanted to offer a big CONGRATULATIONS to the 600 Action Takers who came out to the November ACRE System in Edmonton. This was officially the largest ACRE System and once again was completely sold out! If you were unable to attend live the good news is that Canada’s #1 Real Estate Training Program is available in a Home Study program. For a $200 discount click on the following link to read all the details: http://www.realestateinvestingincanada.com/tabid/59/p-23-ACRE-System-HomeStudy.aspx
#1. Where Are the Canadian Mortgage Rates Going?
This is one of the most often asked questions we receive …and our answer and predictions may surprise you…
Our REIN™ research team is plugged into some of the most brilliant economists across the country, each with their fingers on the pulse of the interest rate market. For example, last month at our REIN™ workshop in Toronto CIBC - World Markets Senior Economist Benjamin Tal spoke to our REIN™ members, giving them the inside scoop on his predictions where the Canadian Mortgage rates will be in the short and long terms.
As expected and predicted by REIN™, the Bank of Canada has raised the Prime interest rate by .5% and we can expect another increase of .25% in the near future. Many people fear the interest rate increase and do not actually do the math on what the interest rate increase mean. For every $100,000 in outstanding Mortgage balance you have, a .25% increase in interest rate only raises your payment by $14.39/ month.
In fact at REIN™ we look at this short term increase in interest rates as a positive sign. The Bank of Canada is keeping inflation in check by raising the rates, and as Real Estate Investors that are concerned with creating long term wealth, this gives us an opportunity to look at potentially raising our rents in those markets that we can, and in those markets that have been held down because of low interest rates.
A rise in the interest rate equals demand for rental increases, which is always good news for Real Estate Investors that invest based on long term fundamentals.
At REIN™ our prediction on interest rates are as follows…
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For the next 12 to 17 months expect a .50 to .75 percentage point increase in the Bank of Canada’s prime lending rate, then after that time the rate will stabilize again.
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After the rates have levelled off … expect them to drop again after 24 months, heading towards record breaking low levels.
Make sure you look at long term trends and do not get caught up in the hype that surrounds the constant media fixation with the interest rates.
#2. Canadian Hourly Wage Updates
Canada’s unemployment rate fell last month to near its lowest point in 30 years. Couple this with the fact that people are earning more income as reported in a study last month. Canadian average hourly wage earners are earning over $19/ hour. This number by itself is not important to investors but if you break down these numbers by Province then it starts to provide you insights into future Real Estate Values. It is important to take note of the Provinces that are earning and growing at a faster pace than the Canadian average and alternatively the many provinces that are not keeping pace with the National numbers.
Average Hourly wage by province and past year growth (%):
Canada - $19.30 (+3.9%)
BC - $19.44 (+0.5%)
Alberta - $20.14 (+6.4%)
Sask - $17.56 (+3.6%)
Manitoba - $17.26 (+2.7%)
Ontario - $20.29 (+5.0%)
Quebec - $18.71 (+2.7%)
Atlantic - $15.78 (+1.9%)
All time low unemployment, Canadians earning more money, and the National core inflation rate hovering around +2.6% translate into great news for Real Estate Investors. Average Canadian wage earners are becoming wealthier across the country, with a few Provinces significantly growing faster than the National average.
Hourly wage statistics are important to watch as Real Estate Investors because, as described by David Baxter, Executive Director of the Urban Futures Institute, there is a direct correlation between people earning and spending more money and the value of housing prices. As Canadians continue to prosper with their pay-checks, housing prices will continue to increase.
Real Estate prices in Provinces where the average hourly wages are increasing faster than the National average are also poised to increase over the long term.
#3. Mortgage Fraud
Every month at our REIN™ meetings we discuss that playing in the ‘Grey Areas’ regarding Mortgage financing is an unacceptable business behavior that will not be tolerated and in fact is against the law.
The RCMP is starting to take mortgage fraud more seriously. A recent news article titled “Sixty Charges Laid against Four Men in Mortgage Fraud Probe” discussed in detail the four year investigation that involved 32 properties and 22 alleged victims. Police officials called these charges laid against these men the largest prosecutions to date… And this is just one of their many current open investigations.
Police define mortgage fraud as a misstatement of facts (large or small) given to a lender, who then mistakenly advances the mortgage funds. The Provincial and Federal governments are taking a number of steps to address mortgage fraud, including hiring more fraud investigators, and establishing a panel of government and industry experts to review laws related to property ownership.
The Real Estate Council of Alberta estimates there are 2,750 occurrences of mortgage fraud each year, adding up to a total cost of $275 million. This is why every REIN™ member, when they join, has to agree to a code of ethics and if anyone is found committing mortgage fraud they will be immediately removed from their Real Estate Investment Network membership…
If you are even thinking about investing in the ‘Grey Areas’ please do not consider joining REIN™… for those of you that are serious about creating long term wealth the ethical way, and learning more about Canada’s leading network of Real Estate Action takers click on the following link to read our online Special Report…
http://www.realestateinvestingincanada.com/Real-Estate-Investment-Network-Membership.aspx
#4. Habitat for Humanity- Women’s Build 2006.
REIN™ has found the Habitat for Humanity project to which they will be donating their time, effort and royalties from Don R. Campbell’s best selling book ‘Real Estate Investing in Canada’. The Women’s Build 2006 is a project that will build 2 duplexes for 4 deserving families in the Edmonton area. At the past REIN™ ACRE System Program those in attendance raised over $38,000 towards this project… If you would like to see more details on this project follow the link below
http://www.hfh.org/index.php?option=com_content&task=view&id=71&Itemid=26
If anyone would like to contribute to this special project you can contact Habitat for Humanity Edmonton Communications Coordinator Brenley Bennett at (780) 479- 3566 or email bbennett@edmonton.hfh.org. You will be issued a tax receipt for your donations and 100% of the funds raised goes toward the building of this project… not administration overhead.
Finally, a big thank-you to all who have read the book. As you may know, 100% of the royalties from the sale of this book are going to support Habitat for Humanity, so they also thank you for your support.
If you enjoyed reading the book… you may want to give this as a gift to someone for Christmas. Click on the following link below to purchase your copies (at 33% off) www.amazon.ca/realestate
If you would like to purchase a CASE of books for your special clients, Joint Venture partners and family members, and if you would like to save 50% off the cover price click on the following link:
http://www.realestateinvestingincanada.com/product/tabid/59/p-28-real-estate-investing-in-canada-best-selling-book.aspx (direct link to secure online server is at the bottom of the page)
KEY NOTE!!!
#5. Unprecedented Action!!! Tremendous congratulations to the REIN™ members who, this year alone, have purchased over 3,000 properties in the past 12 months, and this number continues to grow daily… The total number of property transactions by REIN™ members is now over 13,190 and valued at over $1.25+ BILLION dollars. A big congratulation to those of you who made a commitment to yourself and your family and took action in these past 12 months…
Keep your eyes peeled for key, fundamentally strong Real Estate deals, and no matter who you are dealing with… always do your complete due diligence. Hope to see you at the next REIN™ Workshop in Toronto on December 3rd, Edmonton on December 6th or Calgary on December 7th! If you are not yet a Member of Canada’s most successful by far, and longest running Real Estate Program, now would be a great time. Call Sonya at the REIN™ Office today at 1-888-824-7346 for all the details. Or if you prefer, go to http://www.realestateinvestingincanada.com/Real-Estate-Investment-Network-Membership.aspx to see all the benefits that REIN™ provides you across this amazing country of ours!
It's your time to take advantage of the Real Estate Market in the country with the strongest economic fundamentals in the G7, and as our resources become more in demand around the world our fundamentals will continue to get stronger.
Don R. Campbell and The REIN™ Team
"Turning Real Estate Dreams Into Realities... One Investor At A Time!"
To Tap Into The Latest Canadian Real Estate Strategies Visit http://www.reincanada.com Today.
Real Estate Classified Ads, Insiders Report, Free Research Reports and Much More.
P.S… Just imagine being part of a group of 1,400+ Real Estate action takers. If you have not checked out the online audio success stories click on the following link to listen to some examples… http://www.realestateinvestingincanada.com/Canadian-Real-Estate-Audio-Success-Stories.aspx
P.P.S… From January to October, 2005 the National average house price grew by 9.2%. If you would have purchased an average home in January 2005 you would have paid $240,788 for that home and by October 2005 it would have been worth $265,186. Based on an average house in an average Canadian city you would have realized a $24,398 increase in value in 10 months!!!… Don’t wait to buy Real Estate… Buy Real Estate and wait.
P.P.P.S… Quick reminder that the last ACRE System was again completely sold out! If you were unable to attend live the good news is that Canada’s #1 Real Estate Training Program, is available in a Home Study program. For a $200 discount click on the following link to read all the details:
http://www.realestateinvestingincanada.com/tabid/59/p-23-ACRE-System-HomeStudy.aspx