“Computer programmer Riaz Kassam purchased a two-level penthouse in the trendy Yaletown district of downtown Vancouver last June for $1.5-million, with a down payment of $80,000. Compared to comparable units, the H + H unit should have been priced at $1.6-million, so Mr. Kassam thought he was getting a bargain. By the time the condo was completed earlier this year, Mr. Kassam was shocked to see it appraised at $1.2-million. In order to close the deal, he says his bank requires that he pay a bigger down payment of 25 per cent. However, his current condo has also dropped by more than $170,000 in value, which has made that impossible. Mr. Kassam says the developer is now threatening to sue.
“We even asked our broker to get third-party funding for us, with 10 or 12-per-cent interest – but no one is willing to do that because they need equity,” he says. “The market changed so quickly, no one could anticipate it.”