PRICE IN 2004
     - Rising inventory levels to moderate price appreciation for a more balanced market -

TORONTO, November 26, 2003 - The national average house price is forecast to rise by 3.2 per
cent to $210,500 in 2004 as a replenishment of inventory in many markets across the country will
be a moderating factor in price appreciation according to a Market Survey Forecast 2004 report
released today by Royal LePage Real Estate Services. Nationally, the number of sales
transactions will contract by 1.0 per cent to 429,500 units in 2004.

Price increases will persist in 2004 as favourable mortgage and borrowing rates, at a 45 year low,
continue to make home ownership an attractive and affordable option for Canadians. However,
while demand for residential real estate is expected to remain strong, many first-time buyers who
were anxious to take advantage of low interest rates have already made their purchases, especially
in areas such as Halifax, Toronto and Calgary. This will be a factor in tempering average house
price appreciation as demand softens slightly in these markets.

Rising levels of inventory in Ottawa and Edmonton will have a calming effect on buyers and
sellers after both cities experienced bouts of frenzied activity in early 2003. In 2004, buyers will
be afforded more time to choose amongst a greater selection of listed homes, and vendors will
have to price their homes competitively to sell.

Montreal and Vancouver are still experiencing inventory shortages and both are expected to
continue as strong seller’s markets, characterized by frequent multiple offer situations and shorter
than average listing periods. Pent up demand will quickly erode any inventory gains in these

“Brisk activity is expected to continue in 2004, however, moderating factors are clearly emerging
that will lead to an overall slower rate of price appreciation,” said Phil Soper, president, Royal
LePage Real Estate Services. “Given the intensity of sales activity in the residential housing
market over the past few years, shifts in inventory levels and areas with softening demand will
assist the transition to more balanced, healthy conditions.”

Soper added: “While certain cit ies, such as Montreal and Vancouver, will continue to face an
inventory crunch, most major markets will experience a replenishment of inventory that will
afford house hunters some of the best choices they have seen over the last few years.”

Highlights of the nine markets examined reveal that in 2004, the three most expensive cities in
which to buy real estate will be Vancouver ($361,000), Toronto ($296,000), and Ottawa
($233,900). The three most affordable property values can be found in Halifax ($160,000)
Winnipeg ($112,332), and Regina ($106,500).

Ottawa property values are expected to post the greatest increases next year, rising by an
anticipated 6.5 per cent ($233,900), followed by Edmonton (6.1% to $174,500) and Vancouver
(5.0% to $361,000).

The most marginal increases are slated for Toronto (1.0% to $296,000), Halifax (1.6% to
$160,000) and Calgary (3.2% to $225,000) in 2004.

                                   REGIONAL SUMMARIES

The average house price in Halifax is forecast to rise by 1.6 per cent to $160,000 in 2004, as
demand remains healthy and the market eases into more balanced conditions. Unit sales are
projected to decline by 4.9 per cent to 5,800 in 2004.

“The frantic activity of the past two years, characterized by bidding wars and a strong seller’s
market is expected to ease in 2004. Buyers are now taking more time to make decisions, and the
increase in listings and longer listing periods are signaling a change in the market dynamics,” said
Valerie Folk, manager, Royal LePage Atlantic. “More balanced activity will prevail in 2004.”

Folk added: “The combination of low interest rates and an acute lack of inventory created a hectic
atmosphere. Inventory is showing signs of increasing in all price ranges which will result in a
healthier market in 2004 for buyers and sellers, who will be able to take time to ensure they are
making appropriate decisions.”

Excellent housing affordability continues to attract a diverse pool of buyers into the Halifax
market, from first-time buyers to those looking to cash in on the equity in their homes to upgrade
residences. However, much of the demand from first-time buyers has been satiated and move-up
buyers are expected to be more active in the market in 2004.

Although the market will likely remain in the seller’s favour in 2004, vendors will have to adjust
to the new reality of increased listing inventory and rethink their pricing strategy if they do not
want their homes to sit on the market. As the housing market frenzy subsides in Halifax, buyers
will be unwilling to overpay for properties.

The average house price in Montreal is forecast to rise by 4.2 per cent to $172,000 in 2004. Unit
sales are projected to decline by 3.2 per cent to 45,000 units sold in 2004.

The Montreal housing market experienced heated conditions in 2003 when strong demand and
tight inventory combined with frequent multiple offer situations to create a somewhat frantic
marketplace that resulted in steady price increases. Many of the factors that contributed to the
vigorous activity will continue into 2004, with the inventory crunch being a strong factor in the
decline of unit sales.

Although some inventory has been replenished during the latter half of 2003, pent up demand
quickly erodes any accumulation of listings and purchasers can expect to face some frustration in
their search for a property throughout 2004.

Solid economic fundamentals, including steady employment, along with high consumer
confidence will continue to underpin the demand for homes in Montreal as low interest rates
consistently entice a broad range of buyers into the market. From first-time to executive level
buyers, all purchaser groups will be scouring the market for homes. However, overall in 2004,
the purchasing environment should be less frantic. Favourable mortgage and borrowing rates are
making this one of the most affordable times to buy a home; however, steady price hikes in
average house prices in Montreal over the past few years have slowly but surely priced some
first-time buyers out of the market which will contribute to softer demand in 2004.

“The conditions that characterized the Montreal housing market in 2003 are expected to continue
into 2004,” said Gino Romanese, senior vice president, Royal LePage Real Estate Services. “It
will remain a seller’s market with low listing inventory, frequent multiple offer situations and
shorter than average listing periods. In spite of an anticipated slight decrease in unit sales and a
continuing improvement in the listing inventory, the average price is expected to continue to
increase by 4.2 per cent to $172,000 in 2004.”

The average house price in Ottawa will climb by 6.5 per cent to $233,900 in 2004 which will
account for the highest price appreciation next year in the nine Canadian markets examined.
Property sales transactions will marginally contract by 2.5 per cent to 12,320 unit sales.

Strong residential resale activity in 2004 is expected to be consistent with 2003. Buyers will
continue to enter the market in droves as long as interest rates remain low, although even a
moderate increase is not expected to act as much of a deterrence. Despite a double -digit
appreciation in prices in the past few years, home ownership in Ottawa remains affordable and
attractive to all types of purchasers, from those just entering the market to those who are looking
to downsize.

Although seller’s market conditions characterized the market for the greater part of 2003, housing
inventory replenished during third and fourth quarter and offered prospective buyers a broader
choice of homes. The trend is expected to continue and contribute to the moderation of the price
appreciation in Ottawa in 2004.

“All indicators point to a robust real estate market for Ottawa in 2004. Market activity will be
healthy yet more balanced than in 2003 as listing inventory accumulates. Vendors will have to be
more aggressive in their pricing strategy to sell given that buyers will have more choice in this
market than they have had in a few years,” said Pierre de Varennes, broker/owner, Royal LePage
Performance Realty, Ottawa.

Factors such as healthy job growth, positive in-migration and above average income levels in
Ottawa are supporting consumer confidence in the city. All purchaser groups are expected to
pursue property in 2004, with first-time buyers being particularly active.

de Varennes added: “The number of people renting in Ottawa is still greater than the national
average in 2003, and many of these tenants will begin to pursue properties, particularly
condominiums, in the next year or two, which will keep demand strong in the Ottawa housing

In Toronto, the outlook for the residential resale market in 2004 is for a more balanced market
with marginal price increases. The average house price is expected to appreciate by 1.0 per cent
to $296,000, while unit sales will contract by 3.2 per cent to 75,000.

Toronto’s housing market continued to experience strong and steady demand as well as increased
inventory levels in the latter half of 2003. The volume of quality listings enticed more buyers
into the market and contributed to record sales activity levels in third quarter 2003.

In 2004, activity is expected to decline slightly due to some easing of demand in the Toronto area.
Favourable mortgage and borrowing rates are making this one of the most affordable times to buy
a home, however steady price hikes in average house prices in Toronto over the past few years
have slowly but surely priced some first-time buyers out of the market which will contribute to
softer demand in 2004. With vacancy rates in the city rising to their highest levels in years and
rental prices softening, renting is becoming a more attractive and feasible option for some who
might otherwise pursue home ownership.

Overall, more balanced and healthy market conditions are anticipated for 2004 that will suit both
buyers and sellers and allow more time for property transaction decisions.

“The Toronto housing market is expected to see its second best year ever in 2004,” said Gino
Romanese, senior vice-president, corporate offices, Royal LePage Real Estate Services Ltd.
“Given an anticipated slight decrease in unit sales and a continuing improvement in the listing
inventory, the average price will continue to increase, albeit at a lesser pace than the last few

The average house price in Winnipeg is forecast to rise by 4.0 per cent to $112,332 in 2004 as an
increase in inventory begins to ease pressure on prices. Property sales transactions are to remain
on par with 2003 at 10,450.

“Winnipeg has experienced acutely low inventory levels that have pressured average prices
higher over the last two years,” said Glenn Ponomarenko, broker/owner, Royal LePage Top
Producers Real Estate, Winnipeg. “In 2004, resale housing market conditions are poised to ease.
Demand will remain strong and steady, but inventory levels will begin to rise to meet demand.”

Ponomarenko added: “Although average house prices will rise in 2004, gains will be more
moderate than in recent years and seller’s market conditions will not be as prevalent .”

An increase in listings will be the primary factor in the moderation of house prices in Winnipeg,
as buyers finally begin to see an increase in quality inventory in most categories. However,
listing periods will continue to be short and purchasers who do not make swift decisions on a
property risk disappointment. As the market adjusts to the arrival of more inventory, listing
periods should grow longer.

Move-up buyers are expected to drive activity in 2004 as long as the cost of borrowing remains
low; they can command top dollar for their homes and move into larger residences for a similar
carrying cost. Many first-time buyers looking to enter the housing market while interest rates are
low have already made their move and some of the demand from this type of buyer has subsided.
First-time buyers who are still actively pursuing properties will continue to favour single family
detached homes and some condominiums, which are beginning to gain popularity in the city
among younger buyers.

In Regina, average house prices are expected to rise by 1.7 per cent to $106,500, in 2004. Tight
inventory is expected to contribute to a contraction of unit sales, which are expected to decline by
5.7 per cent to 2,500.

Seller’s market conditions will predominate in 2004 as the depleted listing inventory shows few
signs of replenishing. The cycle of low listings is being perpetuated by potential sellers who are
unwilling to list their homes without first securing a new property. Buyers who are combing the
market for an ideal home, particularly entry-level homes which are especially difficult to find,
will likely face frustration and the possibility of encountering multiple offer situations.

Move-up buyers who are pursuing homes priced over $200,000 are expected to be most active in
2004, as there is slightly more supply in the upper price ranges and seasoned buyers will find this
an opportune time to trade-up because of historically low interest rates.

“Lack of product will continue to be a major factor in Regina’s housing market. It is unlikely that
the market will experience an influx of listings in 2004,” said Bill Ripplinger, broker/owner,
Royal LePage Regina Realty, Regina. “Although new home construction is on the rise, only a
limited amount of projects are nearing completion; pent-up demand will quickly absorb any
inventory gains.”

Regina continues to experience positive in-migration, a strong economy and job growth,
particularly in the government sector. Healthy consumer optimism will continue to fuel demand
for homes, however an accumulation of listings will be required to restore the market to more
balanced conditions.

The average property price is forecast to rise by 3.2 per cent in 2004 to $225,000 in Calgary.
Unit sales are projected to rise marginally by 1.7 per cent to 24,100. Calgary is one of two
Canadian markets examined that is expected to increase its unit sales in 2004.

An influx of new listings to the market put buyers in the driver seat during third quarter 2003,
which gave Calgary the distinction of being the only major buyer’s market in the country at that
time. Solid demand, stimulated by low interest rates, has the market swinging back toward
balanced conditions and in 2004 Calgary’s housing market will be only marginally in the buyer’s

There will be a good deal of quality inventory for buyers to choose from in 2004 and they will be
able to deliberate over their purchasing decisions without pressure. Although market dynamics
are allowing a more relaxed approach to home buying, many first-time purchasers are still eager
to enter the market before prices appreciate further. Entry-level homes are appreciating at a faster
pace than the larger homes favoured by seasoned buyers.

Vendors, on the other hand, should prepare for longer listing periods and rethinking their pricing
strategy as the abundance of inventory results in slightly more supply than demand. Luxury
homes priced over one million dollars are continuing to sell well.

“Overall, consumer confidence is being buoyed by strong economic fundamentals in Calgary
which are expected to continue into 2004. This bodes well for residential resale as we anticipate
a high volume of activity with a steady flow of buyers and sellers moving in and out of the
housing market,” said Ted Zaharko, broker/owner, Royal LePage Foothills Real Estate Services.
“The frenzied market conditions of 2002 have subsided over the past year and are leveling into
healthy market activity.”

Another year of robust activity is expected for Edmonton’s housing market in 2004, with
average house prices forecast to rise by 6.1 per cent to $174,500. Of the markets examined in the
survey, only Ottawa is forecast to have a higher increase in average house prices next year. The
number of homes sold is projected to edge up by 1.5 per cent to 16,403 in Edmonton.

“Steady employment levels, strong economic fundamentals, positive in-migration and low
interest rates are all factors that are buoying consumer confidence and bode well for the 2004
housing market. Brisk activity is expected to prevail in the 2004 residential resale market in
Edmonton,” said Ken Shearer, broker/owner, Royal LePage Noralta Real Estate Inc. “First-time
buyers are particularly enthusiastic about home ownership.”

While the desire for detached bungalows is very high among entry-level buyers in Edmonton,
steady price appreciation in the city over the past few years has pushed single detached homes out
of their reach, and instead, they are gravitating toward condominiums which fit more comfortably
into their price range. Vibrant activity in the condo market is expected to continue in 2004.

Listing inventory was tight for most of 2003, but is starting to replenish. Newly constructed
homes have freed up some supply, as a large number of move-up buyers list their properties to
take possession of larger, new homes. As supply begins to meet demand, the strong seller’s
market Edmonton experienced for most of 2003 should give way to more balanced conditions in

Added Shearer: “Supply is now meeting demand in Edmonton in most property categories and is
poised to surpass demand marginally in 2004. This is also working to entice more buyers into the
market as they find the increase in quality inventory a good reason to resume house hunting.
These factors will contribute to robust activity for 2004.”

The housing market in Vancouver is forecast to sustain a 5.0 per cent increase in average house
prices in 2004 to reach $361,000. Property sales transactions are expected to contract by 2.1 per
cent to 38,000 next year.

Low levels of listing inventory across all housing categories coupled with steadfast demand from
a variety of purchaser groups will continue to contribute to price appreciation and buyer
frustration in Vancouver during 2004. Low interest rates and positive economic expectations
based on the announcement of Vancouver’s successful bid for the 2010 Olympic Games are
sustaining consumer confidence and underpinning demand.

Price appreciation is expected to moderate in the latter part of 2004 as average prices creep up to
levels that are beyond the reach of price-sensitive buyers. Nonetheless, there is enough pent-up
demand to absorb any rise in inventory levels and keep listing periods low. Seller’s market
conditions are expected to persist.

Condominium properties are in high demand in Vancouver and will continue to be popular. First-
time buyers, people buying second or investment homes, and those looking to downsize for a
lifestyle change are turning to condos, and demand is particularly strong for units in the
downtown area. However, well-appointed condominiums in popular areas are in short supply.

High demand for condominiums and brisk first-time buyer activity has contributed to an increase
in vacancy rates in the city and the rental market is now experiencing a softening of prices. As
frustrated house hunters turn to rental units to meet their housing needs, additional supply for the
resale market might be freed up.

“Low levels of listing inventory will continue to exert pressure on average house prices in 2004,
however, the level of appreciation will be more moderate when compared with the last few
years,” said Bill Binnie, president, Royal LePage Northshore, Vancouver. “Prices will begin to
level out as affordability becomes an issue for an increasing number of buyers. ”

                 Canadian Housing Trends:          Market Survey Forecast 2004

Market                   Change                   2004 Forecast            2003 Projected
Halifax                  1.6%                     $160,000                 $157,500
Montreal                 4.2%                     $172,000                 $165,000
Ottawa                   6.5%                     $233,900                 $219,700
Toronto                  1.0%                     $296,000                 $293,000
Winnipeg                 4.0%                     $112,332                 $108,012
Regina                   1.7%                     $106,500                 $104,700
Calgary                  3.2%                     $225,000                 $218,000
Edmonton                 6.1%                     $174,500                 $164,500
Vancouver                5.0%                     $361,000                 $343,679

About Royal LePage

Royal LePage is Canada’s leading provider of franchise services to residential real estate
brokerages, with a network of over 9,500 agents and sales representatives in 600 locations across
Canada operating under the Royal LePage, Johnston and Daniel, Trans-Action and Realty World
brand names. Royal LePage manages the Royal LePage Franchise Services Fund, a TSX listed
income trust, trading under the symbol “RSF.UN”.

For more information visit

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For individual market summaries or further information, please contact:
Eliza Walsh or Andrea McGarry                             (416) 599-0024
E-mails: or
Mansfield Communications Inc.

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