SIGNS. MICHAEL FERREIRA URBAN ANALYTICS INC. October 24, 2014

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1 SIGNS MICHAEL FERREIRA URBAN ANALYTICS INC. October 24, 2014

2

3 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep Change In Consumer Price Index Canada BC Vancouver Source: StatsCan

4 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Source: StatsCan % Change in Retail Sales BC Canada

5 Jul-13 Aug-13 Sep-13 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 % Change in Employment Growth Canada BC Alberta Ontario Ouch! Source: StatsCan

6 60,900 JOBS CREATED IN BC THIS YEAR

7 9.0 Unemployment Rate Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Canada BC Alberta Ontario Source: BC Stats

8 0.8% 0.6% 0.4% 0.2% 0.0% -0.2% -0.4% -0.6% -0.8% % Change in New Housing Price Index Metro Vancouver Canada Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Source: StatsCan

9 20% 15% Change in New Housing Price Index Since April 2008 Toronto 15.9% 10% 5% 0% Calgary 1.6% Canada 6.4% -5% -10% Metro Vancouver -6.1% Source: StatsCan

10 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 % Change in REBGV Benchmark Price Detached Townhome Condominium Source: StatsCan

11 INTEREST RATES

12 Posted Five Year Fixed Rate vs. BoC Overnight Rate 8% 7% 6% 5% 4% 4.75% 7.44% 6.40% 3.00% 5.34% 5.14% 3% 2% 1% 0% Posted 5 Year Fixed BOC Overnight Rate 0.50% 1.25% 5% 4% 3% 2% 1% 0% Oct-03 Mar-04 Aug-04 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Source: Bank of Canada

13 PREDICTION #1 Rates aren t going anywhere anytime soon

14 The Quantitative Easing (QE) Conundrum

15 11% 10% 9% 8% 7% US Unemployment Rate: % - US Fed's target unemployment rate to commence QE tapering 10.0% 7.2% 6% 5% 4% 4.4% 6.5% - US Fed's target unemployment rate to commence rate increases 3% Oct-03 Apr-04 Oct-04 Apr-05 Oct-05 Apr-06 Oct-06 Apr-07 Oct-07 Apr-08 Oct-08 Apr-09 Oct-09 Apr-10 Oct-10 Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Oct-13 Source: Bureau of Labour Statistics Data

16 To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable amount of time after the asset purchase program (QE) ends and the economic recovery strengthens. US Federal Reserve Committee Statement July 30, 2013

17

18 Posted Five Year Fixed Rate vs. BoC Overnight Rate 8% 7% 6% 5% 4% 4.75% 7.44% 6.40% 3.00% 5.34% 5.14% 3% 2% 1% 0% Posted 5 Year Fixed BOC Overnight Rate 0.50% 1.25% 5% 4% 3% 2% 1% 0% Oct-03 Mar-04 Aug-04 Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Source: Bank of Canada

19

20 18,000 15,000 12,000 9,000 6,000 3, ,000 BC Net Interprovincial and International Migration Net Interprovincial Migration Net International Migration Source: StatsCan

21 Third Quarter Net Interprovincial Migration Analysis Others: +131 Quebec: +482 Ontario: +474 Saskatchewan: -315 Manitoba: +76 Alberta: -2,106-3,000-2,500-2,000-1,500-1, ,000 Source: StatsCan

22 International Migration still the primary driver of Metro Vancouver s Housing Market

23 41,569 Annual Average Net International Migrants to BC since 2004

24 16% Average Annual proportion of International Migrants to BC

25 14% Average Annual proportion of International Migrants to Metro Vancouver

26 69% Average Annual Proportion of International Migrants to BC from Asia-Pacific

27 8,752 Total Number of Investor Class Applicants Processed in 2012

28 5,637 (64%) Investor Class Applicants Processed through Hong Kong and Beijing in 2012

29 84,148 Total Investor Class Applicant Inventory as of April 2013

30 59,116 (70%) Investor Class Applicant Inventory at Hong Kong and Beijing

31 Business Challenges for New Investor Class Immigrants to Vancouver / Canada

32 Language Culture Processes & Regulations Higher Wages Size of Market

33 What s to like about Vancouver for Chinese Investor Immigrants?

34 Convenience 130 ish direct flights Ease of integration

35 PREDICTION #2 New Chinese Immigrants will impact our housing market for the foreseeable future

36 THE NEW HOME MARKET

37 Concrete Condominiums Year-to-Date Sales Comparison 4,253 3,075 2,818 2,546 YTD-2010 YTD-2011 YTD-2012 YTD-2013 Source: UAI New Home Source

38 Wood Frame Condominiums Year-to-Date Sales Comparison 2,943 2,502 1,690 1,832 YTD-2010 YTD-2011 YTD-2012 YTD-2013 Source: UAI New Home Source

39 Townhomes Year-to-Date Sales Comparison 2,108 1,622 1,647 1,425 YTD-2010 YTD-2011 YTD-2012 YTD-2013 Source: UAI New Home Source

40 Number of Units 12,000 10,000 8,000 6,000 4,000 2,000 Quarterly Sales vs. Unsold Inventory Total Sales 8,979 Released Inventory 2,650 0 Source: UAI New Home Source

41 Number of Units 2,000 1,800 1,600 1,400 1,200 1, Condominium Inventory By Construction Status Concrete Condos Wood Frame Condos Pre-Construction Under Construction Complete Source: UAI New Home Source

42 Total Standing Inventory Trend 2,135 1,935 1,896 1,532 1,725 1,653 Q Q Q Q Q Q Source: UAI New Home Source

43 Number of Units Standing Inventory by Sub-Market Source: UAI New Home Source

44 Some bright spots

45 Richmond 878 concrete condos sold this year 660 in last two quarters

46 Richmond Wood frame condo demand still strong Alexander Court sells 52 units at launch

47 Tri Cities Nearly 500 concrete condos sold this year 74% increase over 2012

48 Downtown Concord does it again with One Pacific 300 sales in four months

49 Vancouver West Cambie Corridor UBC Product, Product, Product

50 Vancouver East Wall Centre Central Park Shoreline at River District

51 Burnaby Needs more product!

52 North Shore The proverbial hare slow and steady.

53

54 PREDICTION # will be another grinding year

55 Differentiation Through product design and innovation

56 BosaSpace

57 Differentiation Through appropriate product mix and positioning

58 Differentiation Through customer care pre and post sales

59 PREDICTION #4 Supply will remain constrained in urban markets

60 Get ready for more of this

61 PREDICTION #5 Urban master plan mania

62 Oakridge

63 Quebec & 1 st Ave

64 Brentwood

65 Miscellaneous Musings Chinatown & East Hastings will take time

66 Miscellaneous Musings Surrey City Centre will surprise

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