1. Australian Housing Market Ian Graham, Chief Executive Officer

2. The competitive environment provides significant challenges and opportunities for the mortgage market Market share New players New products Home loan affordability Debt service commitment Consumer advocacy Slow growth Price weakness Credit quality Competitors Housing Borrowers Lower growth Interest rate outlook Employment prospects The Economy

3. BIS Shrapnel / PMI Residential Property Market Overview Presented by: Robert Mellor Director, Building & Construction BIS Shrapnel Pty Ltd July 2006

4. Key Issues Has the downturn in residential property markets ended? Is there scope for further price growth in Perth and Darwin? Outlook for interest rates? Is affordability still constraining residential demand? What are the key demographic drivers of the residential market?

14. Source: ABS

29. Summary Affordability remains the key constraint on stronger demand until 2008. Likely rise in interest rates could lead to further weakening in demand over 2006/07, particularly in Sydney. However, modest rise in demand from first home buyers and upgraders expected in Brisbane and Melbourne. Continued weakness in investor demand until 2008.

30. Summary continued…… Perth market likely to peak in the next six months or risk a market correction. Major rental crisis is developing in Sydney, Melbourne and Brisbane, which will drive strong growth in rents. Residential markets in Sydney and South-East Queensland are heading into significant undersupply (or pent up demand).

31. BIS Shrapnel / PMI Residential Property Market Overview Presented by: Robert Mellor Director, Building & Construction BIS Shrapnel Pty Ltd July 2006