Financial Update

Oil drops below US $129 a barrel on demand concerns

· TSX -236.44 Tumbling resource shares led the Toronto Stock Exchange's main index
sharply lower
· Dow +68.72
· Dollar remains above par -.14c to $100.67
· Oil -3.34 to $128.85US per barrel falling sharply on a growing sense that soaring gas and
oil prices have cut demand for fuel during the normally busy summer driving season. Oil
prices were also pressured by the U.S. dollar, which gained ground against the euro.
Investors who buy commodities such as oil as a hedge against inflation when the dollar
falls tend to sell when the greenback strengthens. Also, a rising dollar makes oil more
expensive to investors overseas
· Gold -17.90US to $907.70US

· Bond Rates: http://www.bankofcanada.ca/en/rates/bonds.html

Better deals ahead expected for Canadian home buyers

New listings at record high

Alia McMullen, Financial Post Published: Saturday, May 24, 2008
Canada's housing market might still be expensive, but sellers are going to lose some of their negotiating power over the course of the year as housing supply floods onto the market.
The number of homes for sale in April was double that of the number that were sold as new listings reached a record high, the Canadian Real Estate Association's monthly Multiple Listing Service figures showed.

Residential listings for April jumped 2.8% from the previous month to a seasonally adjusted 77,248 units, while home sales rose 1.2% to 36,614 units. It was the first time monthly sales had increased this year.

The rise in supply, which comes on the back of years of under supply, caused house price growth to continue to moderate from recent highs. The national average house price was up 4% from a year earlier to $317,619-- the smallest annual gain in six years.

"Price increases are now maintaining at levels that are historically more consistent with the Canadian real estate market," Calvin Lindber, president of CREA said.

British Columbia remained the most expensive province, with the average house price up 10.7% over the year to $478,004, followed by Alberta, which fell 0.5% to $353,515. Prices rose 4.8% in Ontario to $314,041 and 4.3% in Quebec to $217,683. Prince Edward Island was the cheapest province, following a 9.8% annual decline to an average $121,807.

Amy Goldbloom, economist at RBC Financial Group said the latest results reflected the mid-point of a balanced housing market that was likely to soften gradually this year.

"As we see more supply coming to market, sellers are going to certainly lose some of their negotiating power, so the bidding wars that we've seen over the last couple of years, particularly in markets like the core area of Toronto, they're going to certainly slow," Ms. Goldbloom said.
She said there would be better opportunities for buyers as supply increases amid cheaper finance as a result of recent interest rate cuts. However, the market generally remained expensive and sales would likely continue to slow.

"The hit to affordability has certainly taken a toll on sales. People have simply been priced out of the market and that's become very evident in overheated markets in Calgary and Edmonton," Ms. Goldbloom said.

Although new listings in Calgary and Edmonton declined in April after posting record levels in March.

Derek Holt, economist at Scotia Capital said the ratio of listings to sales in Calgary and Edmonton had declined rapidly since last fall, dropping from about 90% to 40%.

"That speed of adjustment abruptly turned it away from a deep sellers market towards a marginal buyers market, so that's why they've seen prices come off their peak and why we think that they face a further housing correction in Alberta," he said.

Mr. Holt said while supply was expected to continue to enter the market, Canada would not experience the inventory overhang plaguing the U. S. housing sector.

He said Canada has not experienced the same factors that have driven the excess in U. S. supply, including the flood of foreclosed properties that have entered the market.