A report from the CMHC highlights the link between the increased Saskatchewan retail sales and housing
demand. Retail sales were up 12% over the first 3 quarters of 2007, double the
growth rate experienced one year earlier. This growth has been led by DIY type sales
as home centres and hardware stores have dominated with a 33% year-over-year
increase while furniture stores have seen a 24% gain. Home electronic and appliance
stores have reported annual 20% gains.

The Saskatchewan economy has recovered well from the weak pace in 2006, thanks largely to a
burgeoning natural resource sector and domestic economy. Potash and oil output are soaring, thanks to
elevated prices and expanded production capacity. Retail sales have posted the strongest gains on record,
boosted by a rapid turnaround in net migration and a recent cut in the PST.

A 62% surge in housing starts also fuelled the 2007 economic expansion. Following an impressive 4.3%
surge, the economy will advance more slowly over the next two years. The mining sector, housing markets
and consumption growth are all expected to cool, leading to real GDP growth of 3.4% in 2008 and 3.0% in
2009. Personal consumption will expand at a less rapid rate through 2009, due largely to a reallocation of
income toward higher housing costs and weaker population gains.

In 2007, net migration experienced a remarkable turnaround, led by the hot economy and multitude of
job opportunities. Saskatchewans relatively low-cost housing also proved advantageous, attracting
migrants back from Alberta where home prices have recently escalated. These conditions pushed net
migration to a record high of 14,325 people in 2007. However, with Saskatchewan now leading house
price growth across the nation, the relative housing affordability the province once enjoyed will no longer
serve as a magnet for migrants. Limited by weaker migration, employment growth will slip below the
2.1% expansion of 2007, reaching 2.0% in 2008 and 1.6% in 2009. Most job growth will be full-time.

A record low level of active listings could not prevent sales from reaching 12,000 units in 2007, the
highest number of transactions ever recorded. Sales will continue their upswing in the first half of 2008,
resulting in a modest increase to 12,200 units annually. The rapid surge in prices and weaker speculative
investment will reduce demand to 11,600 units for 2009.

In 2007, Saskatchewans average resale price jumped 32% , more than double the highest growth rate
ever recorded. A low number of active listings, extraordinary demand, and investment dollars from
neighbouring provinces contributed to the furious rate of growth. Progressively higher listings and weaker
speculative demand will restrain price growth to 26% in 2008 and 8% in 2009.

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