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Canadian mortgage fundamentals are solid

House prices continue to perform well and are still undervalued

(1)

220

Low mortgage delinquency rates

170

Subprime is very small part of the Canadian market, reducing the potential for contagion

120

70

Housing Prices (%)

(1)

1994

1996

2002

2004 U.S.

2006 2008YTD

1998

2000 Canada

Mortgage Delinquencies (90+ days)

(2)

Overvalued and Undervalued Home Prices (% under or over valued)

(3)

2.00%

1.60%

1.20%

0.80%

0.40%

0.00% 2000

2001

2002

2003 Canada

2004

2005 U.S.

2006

2007

Ireland Netherlands U.K. Australia France Spain Italy Japan U.S. Germany Canada Austria -2.8% -6.1%

1.7%

    • 32.1

      %

    • 29.2

      %

28.0%

    • 24.3

      %

    • 21.8

      %

17.0%

    • 11.8

      %

    • 11.6

      %

    • 11.2

      %

  • (1)

    Source: CREA, OFHEO, 1994=100. 2008 data through June.

  • (2)

    Source: CBA, Mortgage Bankers’ Association. 2008 data

RBC | INVESTOR PRESENTATION

(3)

through March. Source: International Monetary Fund, 2007

13

Canadian households’ financial position is sound

  • Canadian consumers have a modest amount of leverage

  • Homeowners in Canada have a growing amount of equity investment in their homes

  • Canadian households’ net worth remains

strong relative to historical levels

190%

170%

150%

130%

110%

Household Debt as % of Disposable Income (1)

90%

2000

2001

2002

2003

2004

2005

2006

2007

2008

Canada

U.S.

75% 70% 65% 60% 55% 50% 45%

Homeowners' Equity as % of Total Value of Real Estate Assets

(2)

650% 600% 550% 500% 450% 400%

Household Net Worth as % of Disposable Income (3)

2000

2001

2002

2003 2004 Canada

2005

2006 U.S.

2007

2000

2001

2002

2003 2004 Canada

2005

2006 U.S.

2007

2008

RBC | INVESTOR PRESENTATION

  • (1)

    Source: RBC Economics Research

  • (2)

    Source: Statistics Canada, U.S. Federal Research Division

  • (3)

    Source: Source: Statistics Canada, U.S. Federal Research Division

14

7

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