FORECAST SUMMARY

THE HOUSING MARKET IS EXPECTED TO CONTINUE MOVING TOWARDS RECOVERY IN 2018, BUT CHALLENGES REMAIN.

Housing market conditions are expected to remain relatively unchanged in 2018, as the impact of higher lending rates and stricter lending criteria are o set by modest improvements in the economic climate. Recent changes may have prolonged

the recovery period in our market, but it is not expected to completely derail the transition.

The path to recovery is expected to be bumpy, as the market adjusts to a new normal. We
are entering 2018 with elevated supply levels and an environment of rising rates paired with stricter lending criteria. However, the improving economy generated modest job growth and net

migration last year, with expectations of further improvements into 2018.

The opposing impacts of the changes in the lending environment and economic gains are expected
to cause adjustments in demand/supply balances based on price range and product type, creating pockets of over/under supply and generating di erent paths of price recovery. Overall, it is expected to generate conditions comparable to 2017 and the dynamics within each sector of the market will vary.

Minimal changes in sales activity are expected to be met with easing new listings for some property types, limiting the upward pressure on supply. This should help support more balanced conditions, preventing widespread benchmark price declines.

More balanced market conditions will be led by the attached and detached sectors of the market, while the apartment sector will continue to struggle with excess inventory in 2018. Prices will likely continue to face some downward pressure in the apartment sector, with stabilization not expected until the latter portion of the year.

The attached sector may bene t from changes
in distribution, as some demand shifts from the detached sector to the attached sector of the market, supporting modest price gains of 0.38
per cent. Easing demand in the detached sector is expected to be met with easing listings, supporting overall stability in pricing.