The Canadian Mortgage and Housing Corporation (CMHC) has reported in their latest
Vancouver Housing Association Market Outlook that posted mortgage rates eased by about 50
basis points in the first four months of this year, although rates in late April were 30 to 35
basis points higher than they were 12 months prior. Mortgage rates are expected to trend
marginally lower throughout 2008, but will be within 25-50 basis points of their current levels.

For 2009, posted mortgage rates will begin to drift up slightly as the year progresses. For
2008 and 2009, the one-year posted mortgage rate is forecast to be in the 6.50-7.50 per cent
range, while three and five-year posted mortgage rates are forecast to be in the 6.75-7.50 per
cent range.

The CMHC believes that MLS\u00ae sales in Metro Vancouver will come down off the near-record
high reached in 2007, but stay well above the ten-year average of 31,000. Strong homebuyer
demand, fuelled by job growth and a steady flow of people moving to the region will keep
sales brisk. However, waning consumer confidence and high mortgage carrying costs will
constrain home sales. MLS\u00ae sales will dip 8% to 36,000 units in 2008, and a further three per
cent in 2009 as mortgage rates start to creep up.

The main factors tempering homebuyer demand in Vancouver will be high home prices and softening consumer sentiment. With the average resale home price in Metro Vancouver at more than $600,000 and still rising, some potential buyers will opt to delay their purchase.

Some low equity and first time home buyers could find it difficult to negotiate a mortgage with
achievable monthly carrying costs, in spite of low mortgage rates. First time homebuyers are
an important source of homeownership demand, particularly for apartment condominium
units, making up more than one-third of people who bought a home in Metro Vancouver over
the past year. As mortgage rates were above year-ago levels, this led to a decline in home
sales in the first quarter of 2008 and will keep sales flat in the near term.

Total
Housing
Starts

MLS
average
price

Mortgage
rates
(1 year)

Mortgage
rates
(5 year)