There are fledgling signs of recovery in the Toronto region’s real estate market. But those have come too late for homebuyers like Abid Mirza and his fiancée, Sapna Singh, who bought a pre-construction home in Barrie at the height of the market in February 2017.

They think that their house, not yet finished, is now worth about $100,000 less than the $639,900 they agreed to pay.

Mirza, a PhD student who works in communications and is the signatory on the home, said it will likely take years to recover the home’s value and, in the meantime, their financing costs have risen.

To make matters worse, delays in construction — their builder, Colony Park Homes, had originally offered a closing date of Sept. 11, 2017, that was then extended to April 10, 2018, and is now set for Aug. 8 — have also prompted them to twice delay their wedding. Mirza and Singh, both 29, live with their respective families in Vaughan and Brampton. They want to begin their married life in their own place without the expense and inconvenience of moving into a rental.

A real estate agent and former reporter, Singh said she and Mirza were aware there was risk in the housing market but she wasn’t prepared for the speed and severity of the market’s rise and fall in the past two years.

“We saved up a down payment. We’re first-time buyers,” she said.

Read more:

Real estate experts predict a return to normal for slumping GTA housing prices

Price drop crushes pre-construction home buyers’ dreams

They bought their prebuilt homes at the market’s peak. Now they face financial ruin

Money that was supposed to go towards a wedding will now be used to make up for the lower property value they expect when the house is appraised prior to closing.

The couple are at the tail end of a cohort of buyers and sellers who were caught mid-transaction when Ontario’s former Liberal government launched its Fair Housing Plan in April 2017. The policy, including a foreign buyers tax, threw cold water on the Toronto region’s overheated housing market that had peaked in March 2017 with a 33 per cent year-over-year increase in the average sale price. By May 2017, housing sales in the Toronto region had dropped 20 per cent year over year and house prices have remained relatively flat ever since.

It’s not clear how many consumers are in Mirza and Singh’s situation.

But the fallout on resale homes from the extraordinary last two years was significant, according to a study published earlier this year by Toronto realtor and analyst John Pasalis. He found 988 homeowners lost $136 million in less than five months when the Toronto-area housing bubble burst.

Barrie wasn’t immune to the heat of the Toronto housing market in 2016 and early 2017, said Geoff Halford, president of the Barrie and District Association of Realtors. But things are returning to normal, he said. Even though resale home prices fell 4.5 per cent and the number of sales dropped 28 per cent year over year in June, those figures follow an aberrant period.

The flood of investors who were bidding up prices around the time Mirza and Singh bought their home have left Barrie, and more established neighbourhoods were not hit as hard by the market drop, said Halford.

“I feel badly for people who bought at the peak of the market, but they wouldn’t be complaining if it was up $100,000. It’s put them in a tough position,” he said. “ … Now they have to come up with that $100,000 plus the down payment in order to close the deal. That’s where the challenge is.”

For first-time buyers like Mirza and Singh, fallen values are just one challenge to emerge since last year. New mortgage stress tests were introduced in January and interest rates have slowly but surely begun to climb, although they remain historically low. To finance their purchase, the couple have gone to a B lender, a financial institution that has lower qualifying standards but charges higher interest rates.

“I would never have expected all of that was happening at the same time,” said Singh. She added that while she wasn’t familiar with the Barrie market when they bought, her family has experience buying pre-construction homes and other builders have been more accommodating.

Mirza said they learned how dramatically the housing landscape had shifted when they found 11 similar properties in their Bedford Estates development listed well below the $639,900 they had agreed to pay. In some cases, identical houses were listed for $130,000 less. When Singh contacted buyers who purchased just ahead of them last year, she found many had paid significantly less only a short time before she and Mirza bought.

Loading... Loading... Loading... Loading... Loading... Loading...

Statistics from Altus Group, a research company that tracks new-construction home sales in Ontario, found the average asking price for single-family homes in Barrie — a category that includes detached, semi-detached and townhouses — went from $370,108 in May 2016 to $499,511 in May 2017. This May, the average asking price was $516,353, but Altus cautioned that those prices reflect the kind of houses that are available in that month, not necessarily trends.

After reading in the Star that another builder had allowed some buyers in a similar situation to increase their down payment in exchange for a commensurate price reduction, Mirza and Singh approached their builder’s representative with a series of suggestions they said would allow them to keep their commitment to the company but mitigate their financial damage.

“We asked if the builder can sell our property on their website and take a commission from the sale. They stated that if this is the case, they will list it for $600,000 and we have to pay the $39,000 difference because the house is only worth $600,000,” he said.

They offered to buy another less expensive home even if it meant forfeiting their $32,000 deposit. They offered to close earlier if they could buy a different model.

At first the builder’s representative suggested that a price reduction might be possible. He urged them to focus on their wedding plans, promising to do whatever it would take to make sure the sale closed.

He came back to them later, however, saying that while he disagreed, Colony Park had refused to reduce the price or consider any of the options the couple had proposed, they said.

When the Star called the Colony Park offices, a man who would not identify himself said the company did not respond to questions from media. An email to Alain Chiasson, whose LinkedIn profile identified him as the controller of Colony Park, repeated that the company doesn’t talk to the press.

But he provided a brief statement, saying: “Although we sympathize with the purchaser, the purchasers have signed a contract which we need them to honour in order to allow us to meet our obligations to our contractors, our suppliers, and our employees. We have made every attempt to work with the purchaser in this case to assist him in fulfilling his contract. Thus far all of our purchasers have honoured their contracts and we are not currently aware of any other purchaser with concerns about closing.”

“The thing that took us back was not the fact that the price went down but the unwillingness of the builder to work with us,” said Mirza. “House prices go up and down — that’s normal. But when the market was good, they said, ‘We have you, we’ll take care of you.’ Now they don’t want to help.”

He stressed that he didn’t buy a mansion, but a 1,500-square-foot house with a single-car garage — a home that was farther from their families than he and Singh would have liked.

Barrie realtor Halford counsels buyers to take a longer-term view. “Average price is up 37 per cent in the last five years, including the fact that we went up last year and then came back down, and we’re up 15.7 per cent over where we were two years ago,” he said.

Based on a visit to the building site last week, Mirza isn’t confident his house will be complete by Aug. 8. Still, he said, he and Singh hope to marry in the fall — “as long as no other unexpected circumstances arise from the house.”