What did the neighbours pay? Whitby homebuyers just found out the answer: a lot less
Mattamy Homes says softening market to blame for steep price drop in new Whitby community
Call it reverse sticker shock.
Planned homes in a new Whitby subdivision are on sale for up to $90,000 less than similar homes in the same development were a year ago.
Good news if you're house hunting now. Bad news if you bought into the development a year ago.
"It's painful," Astrid Poei said in an interview.
Last January, Poei and her husband Sheldon Fisher purchased one of more than 100 lots in Phase 1 of the new Queens Common community near Dundas Street West and Highway 412.
Phase 2 of the Mattamy Homes project re-launched this month with the same sized lots and floor plans offered at lower prices.
Poei and Fisher say they were "shocked" to find out that homes and lots very similar to the one they purchased are now on sale for $75,000 less than what they paid.
Eventually — their closing date is February 2019 — the community should be full of new detached homes and townhouses, but right now it's just dirt.
For Poei, the rawness of the site makes the price difference hard to understand.
"There are no building materials on site, there is no foundation poured, so I don't understand how we are paying more than someone who bought a couple of weeks ago."
Builder responding to market
The answer, according to Mattamy Homes Canada president Brad Carr, lies in what was an unprecedented year of change in the GTA real estate market.
"Recently prices in the GTA have drifted downwards," Carr said in an interview. "Obviously we need to respond to be able to sell at prices purchasers are willing to pay."
Despite "short term ups and downs," Carr is confident the homes will appreciate in value over time, as has been the case historically in the GTA, and says buyers who are in it for the long run have nothing to worry about.
"Just like the buyers are extremely happy in a rising market, they have to appreciate that the same decision could go the other way," he said.
In the past year, both the provincial and federal governments have introduced measures intended to cool the housing market, including a foreign buyers tax and the mortgage "stress test."
Durham Region Association of Realtors president Dennis Roberts says the measures helped bring average prices in the area down from record highs last spring and the market has now "balanced out."
"We saw a dramatic drop in price going into this year. It's now much calmer to buy and sell in," he said.
Asked about the reductions in price at the the Queens Common site, Roberts said: "Given the market conditions, it's not that unusual."
'That's not cool'
Still, Mattamy did try to help Phase 1 buyers with the price drop.
Those who could afford it were allowed to increase their deposits in return for reduced prices, but only up to $30,000.
For Dionne Thompson, who also bought in Phase 1, it's not enough.
"To come back a year later and see the same house that we bought is now $90,000 cheaper, that's not cool," Thompson, 52, said in an interview.
Thompson says she understands the market goes up and down, but believes Phase 1 buyers deserve more compensation from Mattamy because they were the first to buy into the project.
Astrid Poei says they'll have longer closing periods and have to endure more construction in the area.
"The new purchasers are standing on our shoulders. Let's respect the Phase 1 buyers who took a leap of faith when this was just dirt," she said.
But Mattamy does not appear to be budging.
Company president Brad Carr says some housing developments stall when the market dips and Phase 1 buyers should be happy Mattamy is pushing forward.
"That's a positive," Carr said.
It hardly feels that way for buyers like Poei and Thompson, who are not looking forward to meeting their Phase 2 neighbours, knowing they paid tens of thousands of dollars less for the same homes.