The biggest shock is not that Canadian housing prices are falling this quickly, but that most people believed that an economy mired in exponentially rising debt could easily withstand a couple of percentage point rises in the rate of interest.
The problem is the price they agreed to pay for the three-bedroom home in March: C$920,000 ($711,000).
By the time their lender got around to appraising the house in May, it marked the value down to C$800,000. A second appraisal a few weeks later was even grimmer — C$740,000.
Legally bound to the deal but no longer able to obtain a big enough loan to go through with it, the couple pleaded with the seller to nudge down the price. On Thursday, they closed at C$810,000. “We didn’t know that the market would crash,” Habibi says.