They paid top dollar for pre-construction homes at the market peak. Now their builder is selling the same models for far less.

Dozens of buyers who thought they were buying their dream homes in two Oakville housing projects early last year when the real estate market was still riding high, say they never expected home values would fall so low or that interest rates would rise so fast.

Now their builder, Mattamy Homes, is selling the same kind of pre-construction houses in the same communities for as much as hundreds of thousands of dollars less - a move the purchasers say is undermining their already impossible financial situation.

They say they are facing financial devastation because their bank appraisals are coming up far short of the amount they agreed last year to pay for their homes, leaving a huge gap in the financing they will get when it comes time to close on their houses later this year.

We are in the soup," says Brampton lawyer Ajit Soroha, who, with his wife, purchased two homes for their family in Mattamy's Preserve West development last February. The houses cost $2.46 million each and they have paid about $800,000 in deposits for the two.

Now Soroha is wondering about walking away from that money but, like other buyers, fears the company will sue him if he doesn't live up to the agreement to purchase.

Mattamy is undercutting us. They are making it impossible for us to close the deal," he said.

The company said it doesn't control the fluctuations of the real estate market and that it expects buyers to honour the agreements they signed.

Neither party signed on to the terms and conditions of the agreement of purchase and sale for a new home lightly. The agreement is legally binding on both parties. While Mattamy works with our home buyers to suggest resources and referrals to help them get their home closed, we enter into these agreements with the expectation that they will be enforced," the company told the Star.

But the buyers, who plan to protest at Mattamy's Dundas St. West sales office on Saturday, say they need the builder to offer some kind of relief - even delay the construction of their houses.

We are in a desperate situation. We are prepared to lose what we have to lose but it will be a big, big financial devastation for most families in that community," said Soroha.

Even without the gap in what they paid and the currently appraised values, the buyers say fallen home prices mean they can't sell their current houses for what they expected last year and their mortgages will cost more.

Soroha said he doesn't know who he blames more - the builder, the Bank of Canada that hiked its key lending rate eight times between March and January, or Prime Minister Justin Trudeau.

Kamran Ahmad, who is supposed to close on a house in Mattamy's Upper Joshua Creek development this spring, said Mattamy's new price structure directly impacts his ability to obtain a mortgage.

Most lenders will only consider an appraisal based on the current sales. Mattamy is referring us to their partner lenders, who may consider (lending) the full purchase price of our agreements, but with very tough conditions where offered rates could be above 10 per cent. Otherwise, they ask us to bridge this enormous gap out of pocket, which is impossible," he said.

Ahmad thinks there should be consumer protections for pre-construction home buyers under these circumstances.

He said buyers should be allowed to back out of pre-construction sales without penalty and with their deposits refunded if the builder drops home prices below a reasonable percentage" such as 5 per cent or 10 per cent or, if interest rates increase above a reasonable value."

These factors are beyond a buyer's control and directly impact their ability to obtain a mortgage. Therefore purchase agreements in such situations should not be held against them," he said.

In an email to the Star, Mattamy vice-president of communications Brent Carey stressed that the company, like its customers, is a participant in a dynamic real estate market that is currently suffering a slowdown in both the new construction and re-sale sectors due to rising interest rates.

Price reductions within Mattamy communities, including those in Oakville, are in line with the broader housing market," said the email.

Sales occur the moment the agreement is signed but home values routinely adjust over time as the market shifts. Prices may rise or fall between signing and closing, but all parties are obligated to abide by the firm contract they entered into and the risks of market fluctuations they assumed," wrote Carey.

Nik Juneja figures his Brampton home was worth between $1.8 million and $1.9 million a year ago when he bought his pre-construction house in Oakville because he liked the greenspaces and the reputation for good schools for his 4-year-old son. Today, he figures his current home is worth about $400,000 less.

His new Mattamy home that is supposed to be ready in August cost about $2.3 million. Now, Juneja said the same model in that development is selling for $1.8 million.

Juneja says his family hasn't so much as been out to a restaurant in the last year.

We are trying to stay home as much as possible. I'm saving right now. But how much will that help?" he said.

I won't say Mattamy is bad," said Juneja. I'm a regular working guy, right? I'm not a lawyer or anything. I'll just request (they) price match or help us in any way possible," he said.

Milton resident Ivalina Petrov said she bought a Preserve West house last March for $1.9 million with a view to more space for herself, her husband and their two young children. She said Mattamy is now selling the same house for $400,000 less.

I know that they have the right to sell to whoever they want and for as much money as they want. But offering the same house, three houses down the street for half a million less than I am buying and closing it at the same time - they're putting me in risk. I'm their customer and they're only benefiting the other customer," said Petrov.

She said Mattamy bought the land for the lower priced house at the same time as it purchased the land for her house.

How is this fair?" she said.

Tess Kalinowski is a Toronto-based reporter covering real estate for the Star. Follow her on Twitter: @tesskalinowski