The latest from news from the Canadian Mortgage Housing Corporation (CMHC) indicates that the housing
market outlook for 2008 is set to see lower demand for new and existing homes, while house prices will
rise by an estimated 4%.

The rapid escalation in house prices combined with recent records for housing starts and sales have
resulted in a large increase in outstanding residential mortgage debt. From 2003 to
2005, mortgage debt in Alberta was increasing at an annualized rate of $3.2 billion. The
most recent data indicates that the annual gain in outstanding mortgage debt has
climbed by more than $11 billion, reaching a total of $59.4 billion. Looking forward,
lower demand for new and existing homes in Alberta will cause price growth to moderate substantially. As
a result, residential mortgage debt will stabilize.

Despite a 24% increase in 2007, Alberta lost its status as Canadas resale price growth leader. Most of
2007s gain occurred in the first six months of the year when the market experienced listings shortages
and a record pace of demand. The second half was met with reluctant buyers and a sharp rebound in
supply, halting the pace of price growth. In such an environment, resale price growth will slow to only 4%
in 2008, the weakest gain in 12 years. With a return to more balanced conditions in 2009, price growth
will strengthen to 5.4%, reaching an average of $389,000.

Average
Residential
Resale Price

Mortgages
approved by
lenders,
residential 2006

Life and
companies
other

2007 E = estimated by the CMHC
* Canada calculation excludes Yukon and Northwest Territories
Data based on application received date
Mortgage approval data are gross and may not fully capture lending activities of credit unions, caisses populaires, other smaller
institutions and privately-insured loans in some areas
Quebec data is understated due to low response rate to the surveys in that province.
*Conventional Lending data only