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HomebuilderStocks.com -- Strong Market Fundamentals Continue to Fuel Growth in Multifamily Housing Stocks
Rising Population Rates Will Drive US Building Industry Through an Increased Need for Multifamily Developments and Clustered Home Construction
| Source: HomebuilderStocks.com, International Barrier Technology, Inc.
POINT ROBERTS, WA and DELTA, BC -- (MARKET WIRE) -- November 29, 2006 -- www.HomebuilderStocks.com,
a global investor and industry news portal for the homebuilder sector,
reviews the strong performance of multifamily housing stocks fuelled in
large part by strong market fundamentals. Multifamily residential market
participants such as fire-resistant building materials manufacturer
International Barrier Technology, Inc. (OTCBB : IBTGF ) (TSX-V : IBH ) are
positioned to benefit from what many predict to be long-term growth.
Despite some downturn, home builders are seeing renewed investor interest
such as the recent report from Bill Gates that his charitable foundation
has made investments in seven of the nation's largest home-building
companies. Among the list was WCI Communities Inc., a premier builder of
luxury communities and condominiums that has seen its stock price rise
$2.45 since the beginning of November, to its current price of $18.20.
Evidence of the success of multifamily housing stocks has been demonstrated
by the surging performance of the National Association of Home Builders
Multifamily Stock Index (MFSI) that has risen approximately 264% since
1998, beating the S&P 500 by over 237%.
The MSFI tracks the stocks of 24 publicly-traded firms, consisting of 20
Real Estate Investment Trusts (REITs) whose principal business involves
activities within multifamily housing. Some notable performers over the
past 12 months have been REITs such as Associated Estates Realty Corp, up
$5.51 or 61%, United Dominion Realty Trust with a stock price appreciation
of $9.85 and BNP Residential Properties, Inc. realizing a $9.44 gain, up
over 64% to its recent close of $24.05.
The cause for the continued strength of the multifamily building market has
been attributed to a variety of key factors. Initially the market received
a boost from a period of low interest rates, which propelled success across
the entire housing market for several years. Following on the heels of a
low interest rate environment was an increased flow of private equity into
the sector that continued to push prices even higher.
Elliot Eisenberg, PhD., a housing policy economist with the National
Association of Home Builders, explains, "It has been a remarkably good
industry to have been an investor in over the last 7-8 years. There have
been a series of factors, one after the other, that have collectively
propelled this market consistently forward and to new highs. The low
interest rate environment propelled house prices upwards -- single family,
and with this came multifamily. As this story was unwinding a new driver
materialized, which is the rise in private capital. There was an increased
interest in leveraged buyouts. This is now helping to raise prices in that
space. There are more available pools of private equity because the stock
market returns have not been very good; REITs and multifamily residences
are the immediate beneficiaries of this."
In addition, multifamily has enjoyed strong market fundamentals over the
past 12-18 months, which continue to fuel the sector. "Vacancy rates for
rental properties are going down, absorption rates are going up, asking
rents are going up. All of the positives expected to happen when prices are
rising continue to occur in this market," states Eisenberg.
Dr. Michael Huddy, Chief Executive Officer of International Barrier
Technology, Inc. (OTCBB : IBTGF ) (TSX-V : IBH ), sees demographics as a key
factor behind multifamily residential market growth. "There is a big
segment of people such as many first time homebuyers and baby boomers as
they begin to retire that are looking to move into homes that do not
require a lot of maintenance. Feeding this are the bigger track home
builders that are beginning to design much nicer and more upscale
multifamily homes and developments to cater to these demographic segments."
"Overall the sector is being driven by the fact that there is going to be a
lot more people living in the United States in the next thirty years
requiring 70 million new homes, so a big percentage of that is going to be
the first time homebuyer who may be interested in the multifamily
marketplace and also couples moving into homes as a second home or
retirement," adds Huddy.
As a developer and manufacturer of environmentally friendly fire-resistant
building materials, Barrier has been able to take advantage of the
continued strength of the multifamily market with recent sales figures
showing monthly sales revenue for October increasing 56% from the same
period last year, with volumes into the multifamily residential roof deck
market representing 62% of total sales.
Dr. Huddy explains, "Multifamily residential construction has more
stringent fire code requirements than single family residences so our
primary residential market is multifamily. As a result, any factor that
helps to improve the multifamily segment directly helps us. Even if housing
starts are down in total, as long as multifamily starts are strong it bodes
well for us because we have a number of code approved applications and code
required applications for multifamily buildings."
Looking forward, unless interest rates rise dramatically, continued
strength is expected within the multifamily housing market. "Trends look
positive and market fundamentals look as though they will remain healthy
for quite some time," describes Eisenberg.
International Barrier Technology, Inc. (OTCBB : IBTGF ) (TSX-V : IBH ),
developer and manufacturer of proprietary fire-resistant building materials
branded as Blazeguard®, is a featured company on www.HomebuilderStocks.com,
an investor and industry news portal for the homebuilding sector within the
InvestorIdeas.com content umbrella. InvestorIdeas.com does not make
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International Barrier Technology, Inc. compensates InvestorIdeas.com; see
disclaimer below.
To read more on International Barrier Technology, Inc. (OTCBB : IBTGF )
(TSX-V : IBH ) visit:
http://www.homebuilderstocks.com/Companies/IntlBarrier/Default.asp or the
Company's web site at www.intlbarrier.com
For our list of companies participating in the home building industry click
here:
http://www.homebuilderstocks.com/Companies/HomebuilderStocks/HomebuilderStockList.asp
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