High cost of cooling real estate, April 5

The government is not responsible for the financial loss incurred by those who locked in the price of their new home while expecting an equal or better sales price on their existing home.

It has always been such that if you buy before you sell, you are at some risk. If you buy a new home, there is that inherent risk.

There had also been talk of a correction in the housing market for some time and these buyers should have considered that.

It’s sad to see some people experiencing a $200,000 drop in their home value, but the government is not responsible.

Mike Faye, Toronto

Although basing their new-home purchase on artificially inflated house prices was very risky, it seems Mattamy Homes could provide some assistance/relief to these buyers.

The most telling part of this story is that the average price for a new detached home has dropped $280,000 or 18 per cent. This means developers were pocketing enormous profits at the expense of home buyers, since they are still making acceptable profits at the new average price.

No wonder house sales have dropped so much over the past 10 years. Who can afford a detached house at $1.22 million, when the median household income in the GTHA is $80,000, which can only support a mortgage of about $350,000 at 5 per cent over 25 years, without spending more than 30 per cent of their income. We need the industry to build housing people can afford.

Victor Doyle, Toronto

I am not a fan of builders but, in this instance, Mattamy has done nothing wrong.

It is unfortunate for the buyers that they’re not getting approved for conventional mortgages but, at $1.6 million, these are not folks who are financially struggling. These are folks who timed the market incorrectly and not getting what they want versus what they need.

Is the Star actually supporting government intervention to help folks who can’t afford $1.6 million but could likely afford $1 million? With all the other social issues we have in this province, supporting families who are obviously not starving and struggling should be way down the list.

The fact these folks bought before having the cash in hand is representative of their market sentiment and, to a small extent, greed.

Jay Chuck, Toronto

The buyers decided, based on their analysis of the real estate market and government policy direction, that it was safe to buy another property before selling their existing house.

These buyers played the real estate game and lost. The signs were all there of an inflated market and that the government intended to do something about it. The government is not to be blamed for their risky play in the real estate market.

Salmon Lee, Mississauga

I agree with Mattamy president Brad Carr that there was a well-publicized heated market at the time these buyers put deposits down on high-end homes in the Preserve development near Dundas St. W. and Fourth Line in Oakville. They were taking a huge risk and should have been aware of this.

Both the new federal mortgage rules and the provincial policy to cool soaring housing costs were aimed at preventing a bubble burst that would have had dire consequences on our economy. It is tough luck that these buyers got burned, but they have only themselves to blame.

I recall people in the late 1970s who ended up with their newly acquired homes being worth less than their mortgages. None of them received any government bailout.

Alan Pellettier, Scarborough

Why didn’t these buyers sell their original homes before committing to a new-home purchase? Because they hoped to ride an escalating market and cash in.

When we bought our new home, we sold our existing home first — no upside gain but also no downside risk. We had to rent until our new home was built — inconvenient but who said you have a right to smooth sailing?

I can imagine all the buyers gloating and rubbing their hands with glee at the anticipated windfall while waiting to sell and riding the market up. They rolled the dice, but now look to everyone else to bail them out. Unfortunate, but too bad.

It is unfortunate that these buyers find themselves in this position but that is the risk they took. I am sure many of us would have liked a bailout for bad financial decisions we have made.

These purchasers already owned homes and would have benefited from rising real estate prices over the past few years, without complaint. Despite well-publicized warnings of a real estate bubble and the need for intervention to cool the market, they made a decision to move up the property ladder, thinking like many that real estate prices never fall.

I will reserve my sympathy for those who have no home, let alone a million-dollar home, and are living on our streets. These are the people who truly need the government to find a solution.

Greg Sheehan, Mississauga