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They purchased homes right before the real estate downturn. Now, they’re struggling to close



A group of Ontario residents who purchased pre-construction homes in Brampton at the peak of the recent real estate frenzy say they’re now struggling to close on their deals because of a perfect storm of rising interest rates, falling home prices and stricter federal mortgage rules.

CBC News spoke to eight people who bought homes at the Paradise Developments Valley Oak community in late 2021 or early 2022. They all said they’re having trouble getting financing due to the sudden real estate downturn brought on primarily by the Bank of Canada raising interest rates in an effort to tame inflation, which has sent mortgage rates skyrocketing and home values plunging.

The buyers, who are mostly from the Punjabi community, say they want to honour their commitments, but with interest rates so high, many no longer qualify for mortgages.

Those that do qualify are being offered hundreds of thousands of dollars less than the amounts they’re on the hook for because appraisal values have fallen dramatically over the past 10 months. Existing mortgage rates would mean unaffordable payments, they say.


Meanwhile, buyers who planned to sell their existing homes are finding few interested buyers as home sales decline across the country.

‘We haven’t slept,’ buyer says

First-time homebuyer Gurcharan Rehal agreed in October 2021 to pay $1.959 million, plus $90,000 in upgrades, for a single-detached home that would house himself, his wife, their two children and his mother.

“We thought, if we live hand-to-mouth, we can still afford it,” Rehal, an Uber driver, told CBC News.

But with his closing date approaching next month, he’s so far been unable to secure a mortgage.

An appraisal recently estimated the home’s value at $1.7 million — more than $300,000 less than what he agreed to pay for it. On top of that, he says the mortgage rate he was pre-approved for would have required monthly payments of $5,000, but now he’s being quoted amounts between $12,000 and $15,000 per month.

Coming up with hundreds of thousands of dollars to cover the difference upon closing — in addition to the $260,000 down payment he’s already made — and making exorbitant monthly payments is something his family simply can’t afford.

“Me and my wife, I think we haven’t slept for [the] last three months,” said Rehal. “Our kids, they can see the stress on me and my wife’s face.”


Homeowner facing mortgage interest rate quadrupling in new year


Toronto homeowner Rebecca Cossar says another hike by the Bank of Canada this week is likely to cause her mortgage’s interest rate to go from under 2 per cent right now, to over 7 per cent when she has to renew in February.

Buyers want closing dates extended

The buyers CBC spoke to say there are around 100 people in the same situation at the development. They provided a contact list showing approximately 60 households.

“We are not able to eat, we are not able to rest,” said Poornima Malisetty, who purchased a detached home in the Paradise Valley Oak community with an in-law suite for $1.9 million that’s now being appraised at $1.6 million.

“Even if we win a lottery, we will not be able to close.”

The buyers are asking Paradise to extend their closing dates or reduce their purchase prices, and have protested outside the developer’s sales office.

In a statement, Paradise Developments said it works collaboratively with purchasers throughout the purchase, construction and closing period.

“Paradise Developments makes business decisions, enters into contracts with suppliers, hires employees and commits to the contracting of numerous building trades based on agreements we have signed,” the statement said.

“Whenever purchasers raise individual issues with us, we look to address them in accordance with our policies and the terms of our joint agreement of purchase and sale. Based on having finalized and completed these agreements, construction is now advancing on the homes in this community, and we look forward to completion.”

Rehal says Paradise has offered some buyers a three month extension on the closing date in exchange for more money on their deposit, but with the future of interest rates uncertain, he’s not sure if he’ll take them up on it. They and the other buyers are still communicating individually with Paradise and hoping the builder will extend their closing dates or reduce the prices.

John Pasalis, a housing analyst and the president of Realosophy Realty Inc., says buying pre-construction homes is risky because buyers aren’t buying a home, they’re signing a contract that obligates them to buy one in the future at a pre-determined price. (Farrah Merali/CBC News)

Pre-construction a risky gambit, real estate broker says

John Pasalis, president of residential real estate brokerage Realosophy Realty, said the situation highlights the risks of buying pre-construction in a hot housing market.

“They’re not buying a home. They’re signing up on a contract that obligates them to buy a home in the future at some pre-determined price,” said Pasalis.

“If, between the time you sign on that dotted line and the time you’re about to take the keys, prices have declined, well, you’re on the hook for that difference.”

Buyers who want to break their contracts risk losing their deposits. But if those buyers walk away, builders could also sue them in an effort to recover the difference between the original purchase price and the price they end up selling the home for.

That’s something Paradise might do in this case. CBC viewed an email sent to one homebuyer where a lawyer for Paradise threatened legal action to recoup “all costs, loss and damages it may suffer as a result of your client’s failure to complete this transaction.”

A construction site showing homes in various states of completion.
The Brampton Valley Oak housing development is currently under construction. Buyers say their closing dates are approaching in the first half of 2023, but a perfect storm of rising interest rates, falling home prices and stricter federal mortgage rules mean they are struggling to close. (Ryan Patrick Jones/CBC)

Wrong home at the wrong time

The Bank of Canada began incrementally raising its trend-setting interest rate in March when it was at 0.25 per cent. It’s now at 4.25 per cent.

Home prices in the Toronto region, which had been rising steadily since 2018, have cratered since then, as have new sales.

The average sale price of a detached home in Brampton went from $1,608,894 at its peak in February to $1,197,119 in November, a decrease of more than $400,000, or 25.5 per cent, according to data from the Toronto Regional Real Estate Board (TRREB). The number of detached home sales in the city dropped to 142 from 460 in the same period.

Variable mortgage rates, meanwhile, that were around 1.45 per cent one year ago have increased to around 5.45 per cent, according to Ron Butler, founder of Butler Mortgage. Five-year fixed rate mortgage rates have increased from 2.89 per cent a year ago to around 5.49 per cent today, Butler told CBC in an email.

Compounding the problem is the federal mortgage stress test, which requires buyers to be able to show the ability to pay mortgage payments of 5.25 per cent or two per cent above their approved rate, whichever is higher. Most buyers were stress tested at 5.25 per cent last year when interest rates were low, but now they’re being tested above seven per cent.

“If you, by no fault of your own, got unlucky with your timing you can certainly be in a strained situation,” said James Laird, co-CEO of and president of mortgage lender CanWise.

Ontario Today51:38Is Ontario’s new housing legislation what’s needed?

The provincial government’s goal is 1.5 million new homes in the next decade. But there’s lots of opposition to its plan to get there. Our guests are TVO columnist John Michael McGrath; Toronto City Councillor Jaye Robinson; and Dave Wilkes, President and CEO of the Building Industry and Land Development Association. Walk on appearances by John Gerretsen, former Liberal Minister of Municipal Affairs and Housing; and Ontario Green Party Leader Mike Schreiner.

Condo buyers are facing similar issues and developers are also feeling the pinch of a challenging market.

Kevin Lee, CEO of the Canadian Home Builders Association, said inflation has raised construction and labour costs, while higher interest rates have raised the cost of financing projects. Lee said developers have very little flexibility when it comes to recouping their costs.

“When it’s coming time to close on purchases, it’s not like there’s a whole bunch of wiggle room on the builder-developer side of things,” Lee said. “Otherwise, they’re in a situation of taking big losses.”

Laird and Lee say the market could stabilize sometime next year after the Bank of Canada hinted last week it may be finished with rate hikes.

That would be the best scenario for the Paradise buyers, but it could be a case of too little, too late.

“Emotionally and financially, this gonna disturb my whole life,” said Rehal, who’s now unsure if he’ll ever be able to buy a house in Canada.

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Irish Real Estate Returns Drop Amid Higher Interest Rates – Bloomberg



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Irish Real Estate Returns Drop Amid Higher Interest Rates  Bloomberg


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Bank of Canada comments offer light at the end of the tunnel for real estate, mortgage markets, experts say



Canada’s struggling real estate sector is breathing a sigh of relief, but it wasn’t so much the size of the Bank of Canada’s Jan. 25 rate hike as the language that came with it that was cause for optimism.  

That’s because while the central bank boosted its benchmark overnight interest rate by 0.25 basis points to 4.5 per cent, its eighth consecutive increase, it also signalled it would put the hiking cycle on pause — at least for now.  

“A 25-basis-point increase or no increase was what we needed, along with the kind of language … that indicated we were essentially where we needed to be” Royal LePage CEO Phil Soper said in an interview. “What’s important at this stage is that we’ve clearly come to a point where interest rates aren’t going to be in the news.” 

Soper said the realization that rate hikes will be stopping or slowing should draw what he called the “missing transactions” — those with the capacity to buy but who have remained on the sidelines — back into the market, though it may take some time. 


Those buyers, he said, have been reluctant because they understand the link between rising rates and prices, and “they don’t want to buy a house today that will be worth less tomorrow.” 

Having some price certainty will make it easier for them to enter the market, but they’ll still need to be comfortable knowing they are paying five or six per cent on their mortgages while others are locked in at two per cent.  

“There’s still many, many people out there with two per cent mortgage rates. Your sister or your cousin might have a two per cent mortgage rate but you’re going to have to pay five,” Soper said. “This will harm consumer confidence until the market has more time to adjust to it.” 

As a result, he said he saw a “muted recovery” in the cards for the spring. 

The pause also signals a light at the end of the tunnel for variable-rate holders, according to James Laird, Co-CEO of and president of mortgage lender CanWise, even if it means another dose of short-term pain. 


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Clearview Commercial Realty’s investment funds help expand portfolio



After 22 years in the Calgary office of a global commercial real estate firm, Steve Vesuwalla started his own company, Clearview Commercial Realty, in 2019. A year ago, he established Clearview Industrial Fund, with all capital raised though Alberta investors.

Its success has been remarkable, with the closing of the first three funds that brought Clearview a portfolio of 300,000 square feet, comprising a 260,000-square-foot building anchored by the north campus of CDI College and a 35,000-square-foot industrial building in South Foothills

The third fund launched in 2022 resulted in a residential project in partnership with NAI Advent.


Mission 19 is a luxury 67-unit apartment block that will welcome tenants this fall, designed by Gravity Architect and being built by Triumph Construction in the trendy Mission District at 320 19th Avenue S.W.

Last month, Vesuwalla embarked on a fourth — the Clearview Alberta Opportunity Fund — with a goal of raising a pool of equity that will allow his company to act quickly when commercial real estate opportunities arise.

“Successful real estate ventures result from being able to find appropriate investments and having the ability to purchase right away,” says Vesuwalla. “And cash is still king.”

Acumen Capital Partners handled the equity raise and the first round of financing closed last month. A second round is scheduled to close at the end of this month.

The first purchase — in cash — by the new fund is the former Economy Glass building at the corner of 17th Avenue and Centre Street S.W. in the Beltline district.

The 11,500-square-foot building on a .33-acre site has drive-in overhead/roll-up doors, existing office and retail showroom improvements, and highly usable and accessible lower level space.

Vesuwalla is working with a restaurant group and fitness operator to take over the spaces, but the location is ideal for future development as a multi-storey commercial-residential building. That will be planned on the completion of the extension of 17th Avenue across Macleod Trail, giving direct pedestrian and vehicular link access into the Stampede grounds, the BMO Convention Centre expansion and the Victoria Park/Stampede LRT station redevelopment.

No doubt that connectivity will invite further commercial, retail and entertainment-oriented development along 17th Avenue and in the immediate area.

Doug Johannson, executive vice-president at Clearview who joined the company in 2021, has also been busy completing some commercial real estate deals.

Explosive growth in development of commercial real estate in the Balzac area has continued with the sale of 33.85 acres on the south side of Highway 566.

Located between the successful developments of High Plains and Wagon Wheel industrial parks, it was sold by Johannson on behalf of the Abbotsford, B.C., owner to a local developer for $8.8 million.

He was also the broker for the sale of a 17-acre parcel in Frontier Park to Remington Development, and has an unconditional contract to close on the sale of a 43,500-square-foot building on Enterprise Way, between Stoney Trail and the eastern city limits.

Last year was a good one for Clearview and it has started 2023 full of confidence for even better results from commercial real estate transactions, as well as opportunities the new fund will bring.

Vesuwalla and Johannson continue to look for interesting value-added opportunities to increase Clearview’s rewarding portfolio.


President and CEO of Bow Valley College, Dr. Misheck Mwaba, has been appointed to the board of the Calgary Chamber of Commerce for a three-year term. “I look forward to working closely with the board on strategic initiatives to address the evolving needs of the Calgary business community,” says Mwaba. “I am acutely aware of the urgent need to develop and retain a world-class talented workforce, nurture a diversified economy and grow our digital ecosystem. Mwaba is a champion of Workforce Integrated Learning (WIL), re-skilling and up-skilling, and takes pride in liaising with Calgary businesses to understand their labour demands.

David Parker appears regularly in the Herald. Read online at He can be reached at 403-830-4622 or by email at



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