Condo market dip leaving pre-construction buyers in the lurch

Vtor Almeida is desperate. He bought a

pre-construction condo just over 5 years

ago. Now it's built, but the value has

dropped and he can't get a mortgage.

>> If I did know that uh this could could

have happened, I wouldn't have uh bought

the condo.

>> Like a growing number of Canadians,

Almeida couldn't close the deal. He's

lost his deposit of about $130,000

and may owe the builder even more. I

thought, you know, we would be okay. I

didn't think that um somebody would come

and and take away our life savings.

>> Since hitting a peak in 2022, house

prices have collapsed. Toronto condos

hit especially hard, falling 25%.

Preconstruction buyers are particularly

vulnerable. Here's why. If they signed

an agreement to purchase a home for

$500,000,

but at close, the appraisal plummets to

400,000, the buyer needs to make up the

difference.

>> No one has that money readily available.

So, they're having to come up with sort

of creative solutions to bridge that gap

in order to uh ensure that they can

close.

>> That has some turning to social media

trying to find others to take over their

units. If they can't reassign, they may

be able to find an alternative mortgage

lender. But walking away entirely is

much more difficult.

>> There's no question that the developer

will chase you through the courts and

they will win because you signed a valid

contract.

>> There are more than 22,000 condos

forecast to be completed this year in

the greater Toronto area. Experts

predict up to 35% of buyers could

default. No one escapes. No. Every

single person is closing on a unit that

they bought five years ago that's worth

less than what they paid for it.

>> And if home prices continue to fall,

those losses will keep growing. Nisha

Patel, CBC News Toronto.