New Construction Crisis: Why Some Canadians Can’t Close on Their Homes — And What You Can Do About It

The Dream vs. Reality of Buying Pre-Construction

Buying a pre-construction home used to be one of the smartest ways to get into the market. Lock in a price today. Move in later. Watch your equity grow while you wait.

But for thousands of Canadians who bought at peak pricing in 2021 or 2022— that dream has turned into a nightmare.

Here’s what’s really happening in today’s new construction market — and what options are available if you’re caught in the middle.

Real-Life Scenarios

One Toronto buyer paused a $2.195 million contract, having deposited $439k (20%). A fall in appraised value to $1.6 million meant a $595k shortfall. Builders and banks offered financing, but he opted to walk away—losing his deposit.

Another couple purchased for $729,900 but appraised at $630,000—needing an extra $100,000 and facing $45,000 in new closing fees. With help from a private lender, they made it work.

These examples represent just the tip of the iceberg.

What Happens If You Can’t Close

• Loss of your deposit: Typically 5–20% of the purchase price, sometimes hundreds of thousands 

• Potential lawsuits: Builders may claim the difference between your purchase price and eventual resale value—sometimes adding legal fees and holding costs. Courts have ruled in their favour multiple times 

• Legal judgments: A court judgment can lead to wage garnishment, liens, and long-term credit damage .

• Stress and uncertainty: Any delay increases your risks and possible costs.

What Can You Do If You’re in This Situation?

If you're worried about closing — you are not alone, and you do have options.

✅ 1. Order a Fast Appraisal

Don’t wait until the last minute. Get a current assessment now — it gives you time to strategize.

✅ 2. Tap Alternative & Private Lenders

• Bridge financing may help you cover the difference.

• Some private lenders base loans on contract price—not appraised value. Watch for higher fees and rates .

  
  

✅ 3. Secure a Co-Signer or Gifted Deposit

Borrow from family or close friends to make up the down payment shortfall. Immediate cash can save your deal.

✅ 4. Do a Builder Assignment

Sell or assign your contract before closing. You’ll likely lose your deposit, but it may protect you from legal exposure.

✅ 5. Ask Your Builder for Help

Some builders are offering vendor take-back mortgages, blanket appraisals, or extended closings to protect their sales.

✅ 6. Review Your Contract Thoroughly

Engage a real estate lawyer to help review deposit protections and closing clauses to avoid nasty surprises 

✅ 7. Repackage Your Financing

Consolidate equity, cover shortfalls, or refinance existing assets while avoiding penalties — we can guide every step.

How Swivel Mortgage Group Can Help

Whether you’re:

• Facing a closing in the next 30–90 days

• Considering walking away from your deal

• Looking for solutions on how to bridge the gap

We can help you analyze your options, negotiate with lenders, and explore every avenue to protect your investment and your financial future.

We’ve already helped dozens of buyers save their deals, minimize their losses, or find creative financing solutions they didn’t know existed.

Let’s Talk Before It’s Too Late

The earlier you reach out, the more we can do. Don’t wait until your closing is a week away.

Schedule a free, confidential mortgage review now.

We’re here to help — no pressure, just real advice.

👉 Book Your Mortgage Strategy Call 647-794-7676

📧 Or email us info@swivelmortgage.ca