1. Housing market intelligence you can count on Housing Market Overview Peter Friedmann General Manager, Ontario Business Centre CMHC March 19, 2014

2. Housing market intelligence you can count on Outline of Presentation The Macro Influencers Interest Rates and Mortgage Rates Resale Market New Construction Market Housing Stock Indicators Final Thoughts CANADA MORTGAGE AND HOUSING CORPORATION

3. Housing market intelligence you can count on The Macro Influencers

4. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION GDP Growth

5. Housing market intelligence you can count on Weaker Cdn$ Also Trade Supportive US per Cdn$ Source: Statistics Canada

6. Housing market intelligence you can count on US Industrial Sector Leading Year to Date Manufacturing Index - PMI (index>50 = expansion, index<50= contraction) Source: JP Morgan, MARKIT Expansion

7. Housing market intelligence you can count on Ontario Exports Bigger Piece of GDP Pie 33% of GDP Housing Exports 20% of GDP Source: Statistics Canada Provincial Economic Accounts, CMHC

8. Housing market intelligence you can count on Ontario Benefits Most From Improving US Economy Source: Statistics Canada, CMHC calculations Correlation Between US GDP & Provincial GDP

9. Housing market intelligence you can count on Outflows To West From Rest of Canada Slowing CANADA MORTGAGE AND HOUSING CORPORATION Net Migration Between Provinces Source: CMHC Forecast, Statistics Canada

10. Housing market intelligence you can count on Ontario Businesses Gaining Confidence Source: Canadian Federation of Independent Business (CFIB) CFIB Business Confidence Index

11. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION Stratford-Bruce ER580 Employment

12. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION Stratford CA Population Aging Population Change, 2006-2011

13. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION Young Adults Leaving Perth County in Last 5 Years

14. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION Perth County Migration Gains in 2011-2013

15. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION Immigration Adds to Perth County Population

16. Housing market intelligence you can count on Interest Rates and Mortgage Rates

17. Housing market intelligence you can count on Long Term Rates Will Rise Despite Stable Overnight Rate US & CDN 10yr bond yields % Source: Statistics Canada

18. Housing market intelligence you can count on Fixed Rate Mortgages Dominate – Only Some Will Reset CANADA MORTGAGE AND HOUSING CORPORATION Source: The FIRM Survey – Winter 2013 Outstanding Mortgages

19. Housing market intelligence you can count on Existing Mortgages Will Reset Below Contract Rate Average Contract Mortgage Rate, 5yr Discounted Fixed - CANADA Year of Mortgage Reset Source: CMHC, FIRM Reset Rate Range

20. Housing market intelligence you can count on Resale Market

21. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION Ontario MLS ® Sales

22. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION Ontario vs. Huron Perth MLS® Sales

23. Housing market intelligence you can count on Affordability Varies Across the Province Actual Income as % of Required Income to Purchase Resale Home - 2014 Source: CMHC Forecast, Statistics Canada, CREA

24. Housing market intelligence you can count on Tighter Markets in Western Ontario Sales to New Listings Ratio, 2013 Source: CREA, CMHC

25. Housing market intelligence you can count on Huron Perth A High-End Balanced Market CANADA MORTGAGE AND HOUSING CORPORATION Source: CMHC, CREA Sales to New Listings Ratio

26. Housing market intelligence you can count on New Construction Market

27. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION Ontario Housing Starts

28. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION Stratford Housing Starts Starts

29. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION Housing Starts, % Change 2012-2013

30. Housing market intelligence you can count on Single Detached Prices Continue to Increase in KCW CANADA MORTGAGE AND HOUSING CORPORATION

31. Housing market intelligence you can count on High Number of Apartment Units Under Construction Apartment Units Under Construction - ONTARIO Source: CMHC

32. Housing market intelligence you can count on Builders Started Fewer Apartment Projects in 2013 Source: CMHC

33. Housing market intelligence you can count on Condo Investor Contributing to Supply % Estimate of Condominium Apartment Universe Held By Investors Source: CMHC Fall Rental Market Survey

34. Housing market intelligence you can count on Conventional Rental Supply Falling Short of Demand Source: CMHC Forecast 2011-15, Statistics Canada Completions, Household Formation - ONTARIO

35. Housing market intelligence you can count on Households and Housing Stock Indicators

36. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION Ontario CMA Vacancy Rates, October 2013

37. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION 68% of Stratford Households Own

38. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION 55% of Stratford Housing Stock are Single-Detached

39. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION 80% of Stratford Housing Stock Built Prior to 1990

40. Housing market intelligence you can count on CANADA MORTGAGE AND HOUSING CORPORATION Stratford Household Income by Age

41. Housing market intelligence you can count on RISKS TO THE HOUSING OUTLOOK Fiscal uncertainty impacts financial markets, business confidence China growth decelerates faster than expected Rotation from domestic to trade driven growth stalls Rates move higher than expected Condo apartment registrations grow faster UPSIDE RISKS US economic growth accelerates above forecast Canadian interest rates move lower CANADA MORTGAGE AND HOUSING CORPORATION DOWNSIDE RISKS

42. Housing market intelligence you can count on FINAL THOUGHTS Developed Economies Gaining Momentum – US Leads West Will Lead But Performance Gap is Narrowing Resale Housing Will Lead - Starts Gain Momentum in Longer Term As Echo Boomers Mature Empty Nesters Contribute To Ownership Demand in Short Run Short Term Rates on Hold - Long Term Rates Will Gradually Creep Up The challenge for Stratford home builders is to adapt to the aging demographics