From mortgage costs to utilities, developers getting creative with incentive offers

If lower interest rates can’t push homebuyers off the sidelines, perhaps a year’s worth of free borrowing costs will.

That’s the hope for one developer whose offer joins a growing list of incentives aimed at luring buyers, as hesitation lingers across most major housing markets in Canada.

The campaign announced last week by Mattamy Homes would see the firm cover mortgage payments for up to a year on its new builds located within six neighbourhoods in the Calgary and Edmonton areas. Eligible properties must be ready for occupancy by the end of 2026 and Mattamy has capped the total incentive at roughly $50,000, suggesting a home worth up to about $1.02 million.

“I’d be lying if I told you there wasn’t some degree of this being born out of a need,” said David Wan, vice-president of sales for Mattamy Homes’ Alberta division, in an interview.

“We’re seeing prices come down a touch and our competitors are also pulling every trick they can out of the bag to try to steal some market share and to just drum up sales themselves.”

Wan said lowering the actual price of a house only goes so far in motivating buyers, noting a $50,000 discount on the sale price might lessen monthly mortgage payments by around $100 over 30 years. Mattamy is banking on a belief that monthly payments are a major factor still holding back would-be buyers.

“The idea is that we are trying to help them with their cash flow, more so than just simply reducing the price,” he said.

“Because of this assistance program, it really enables a lot of people to not have to continue sitting on the fence, take action today when there’s so many interesting ways that you can buy a new home with incentives, with assistance from the government.”

The timing happens to roughly coincide with applications opening for the federal first-time homebuyers’ GST and HST rebate — valued at up to $50,000 for those eligible. That relief eliminates federal tax on a new home valued at up to $1 million for first-time buyers, and reduces the amount of tax they would pay on a new home valued between $1 million and $1.5 million.

On Wednesday, the Ontario government said it was planning to temporarily expand HST rebates on the purchase of new homes. The temporary measure would see homes valued up to $1.5 million qualify for the maximum amount of $130,000 when combined with the federal rebate, and it would not be limited to first-time buyers.

“In weak economic times or during periods of housing slowdowns — like the early 1990s, after the 2008 financial crisis and now — builders and developers get creative when it comes to creating incentives,” said economist Mike Moffatt, the founding director of the University of Ottawa’s Missing Middle Initiative.

But he said the trend is more often prevalent on the purpose-built rental side of the housing equation, where landlords offer perks such as covering a few months’ rent or a free parking spot. With sales of both new and existing homes continuing to lag, partly due to economic uncertainty, potential homebuyers are also being courted.

“We are seeing a lot more incentives on the ownership side now than we saw 12 months ago and definitely more than 24 months ago,” said Moffatt, noting Mattamy’s mortgage-focused offer is unique compared with others he’s familiar with.

“But having incentives — free upgrades or things like that — are relatively common in weak housing markets.”

Wan said Mattamy hopes its incentive can reel in somewhere between 200 and 300 buyers. He said he’s optimistic given recent signs of possible market stabilization in Alberta, but affordability is still a challenge for many hoping to make the leap to ownership.

“At the very early embryonic stage of conceiving this idea, we did think about maybe making it a little bit more modest, perhaps three months or six months (of mortgage payments),” Wan said.

“But the more I talked about it with our focus groups … the more I felt that if we really wanted to genuinely help people with home ownership, addressing affordability and especially looking at it from a cash flow perspective, doing the one-year payment holiday made the most sense.”

Other homebuilders are getting in on the action too.

Last year, London, Ont.-based developer Foxwood Homes launched its StartSmart program, which covers up to one year of buyers’ property taxes, utility bills and other related costs.

The offer, capped at $12,500, was originally limited to buyers who signed on the dotted line by last September, but Foxwood decided to extend it due to strong uptake.

“Essentially what we’re doing is offering a financial equivalent to what the average taxes and utility costs would be for our homes … just to make the purchasing process that much easier,” said Kevin Barry, Foxwood’s broker of record.

Barry said the developer is “responding to market conditions,” but the incentive is a brand new tactic for Foxwood.

“More than anything, what it’s doing is making the phone ring, having online inquiries, increasing the visits to our sales centres,” he said.

“It is certainly a creative solution to get buyers off the sideline … Obviously where we are with market conditions, I think buyers have hit the brakes or the pause button.”

Toronto-based broker Marco Pedri said he’s increasingly encountering various perks when navigating the market with his clients.

At a newly built townhouse complex in Burlington, Ont., one developer advertises an offer to cover maintenance and POTL fees for up to two years, he said. Others range from an extra free parking spot or locker to upgraded finishes and appliances within the home.

“Specifically, now in today’s market, developers are doing anything they can do to move inventory,” said Pedri, adding that goes for both houses and condos.

“The end user can now go around and see who’s offering the best incentives that really sweeten the pot.”

Pedri said savvy buyers are being swayed by offers that carry the most long-term value given ongoing uncertainty in the economy. Incentives that cover taxes or fees for up to a year or two are “nothing to scoff at” when it comes to improving affordability, he said, but buyers are more motivated by proposals “that really help appreciate the actual purchase.”

“A lot of buyers … are really more interested in saying, ‘I could get an additional parking spot, I can get an additional locker, I can get an upgraded kitchen with better countertops, better cabinet finishes and that is going to stick with me longer than two years, and that may actually help me on the selling side.'”

Moffatt said he anticipates these offers will only grow more commonplace.

While sellers of existing properties can reduce their prices to meet demand in a buyer’s market, he said new construction differs because it carries a price floor.

“There’s only so low the prices can go and then it just becomes economically not viable, whereas on resale, the price can theoretically go as low as buyers are willing to accept,” said Moffatt.

That means developers need to think outside the box to attract buyers.

“In any product category, whether it be cars or appliances or anything else, there is always a hesitancy to lower prices too much because then it’s seen as being reflective of the quality,” he said.

“I do think we are going to see more novel pricing strategies than we’ve seen in the past. A lot of it is just builders and developers catching up to the rest of the economy.”

This report by The Canadian Press was first published March 25, 2026.

Sammy Hudes, The Canadian Press