Builders, developers and lenders pulling out the stops to entice homebuyers

By Wayne Karl
October 06, 2022

It might not be wise to perceive real estate markets in the GTA and elsewhere in Ontario as humming along as usual, without any challenges. Clearly, there are some short-term issues – namely, sales and price pressures, juxtaposed against rising interest rates, inflation and other economic questions. Plus, longer-term matters, chiefly housing supply, or lack thereof, and its impact on market dynamics.

But neither is the sky falling.

Thus, as we (and our expert columnists) often write, it is important to understand all these factors, and how they might affect your homebuying plans. Knowledge, as they say, is power.

If there’s one rule of thumb in real estate that you’re likely familiar with, it’s location, location, location. But especially during these times, it’s important to look at your housing purchase over the long term – say, five to seven years.

And in this context, the GTA is well positioned.

Take, for example, these insights from two of our experts:

“Media reports indicate real estate slowdowns across the GTA because of higher interest rates, but right now at In2ition Realty, we’re selling condominium suites and homes steadily at all the sites we have launched this year,” says Debbie Cosic, CEO and founder of sales and marketing firm In2ition Realty, and author of our Home Realty column. “In fact, most of our clients’ sales have reached construction thresholds already. We also have numerous projects gearing up to launch soon. As far as we’re concerned, we are simply back to a normalized market, during which we sell strongly and steadily, versus overnight blowouts.”

And from Real Estate Pro columnist Barbara Lawlor, “The pandemic and interest rate rises have had their effects, but once again, I want to make the point that at Baker, our pace hasn’t slowed at all. In fact, our sales are up year-over-year. Our developers are going full steam ahead as well.”

So, like so many other things in life, when there are reasons to be cautious, for those well prepared, there are also opportunities.

Some builders and developers, for example, are offering attractive incentives and upgrades, to sway any prospective buyers who may be sitting on the fence. One townhome project in the GTA is advertising a “zero-per-cent mortgage program,” a flexible deposit structure and other enticing features.

For further insights, we tapped a select group of new home and condo developers and marketers. Here’s what they had to say:


Jordan DeBrincat, Vice-President, Altree Developments

There is no question as to whether the current economic situation of rising interest rates has affected the real estate market on all fronts. With the hike in interest rates in such a short period of time, there has been a “cooling” in the market, making purchasers have second thoughts on the timing of real estate purchases. We can see that some purchasers are potentially “holding off” for a while to see where interest rates are going before they proceed with a purchase of this nature.

However, the Toronto market is very strong, and although there is a current cooling-off in the market, things will bounce back sooner rather than later. Even with the current interest rate hikes, not all purchasers should lose confidence in the real estate market, as there will always be a demand to live in a city like Toronto. One piece of advice I truly believe in is that, people should not be looking at real estate as an investment for the short term, but for the long term. If you are purchasing a pre-construction real estate asset now, even with the interest rates as high as they are, by the time the asset is ready and you are about to close on it, interest rates will likely have decreased to a more stabilized rate.


The incentives we’re offering purchasers vary from project to project, depending on the status/timelines of each one. If a project is well under construction, normally we have a little more wiggle room on deposit amounts and the timing of those deposits, and that is normally an incentive that we would offer on a project at this stage. If a project has not officially begun construction, or is in the beginning stages, the timing of purchaser deposits is extremely crucial, so we would lean towards offering incentives of closing adjustments – either capped/included development charges and/or closing costs.


At Altree, we pride ourselves on offering quality features and finishes for each individual project. We are very proud of our projects and what we have to offer, and would never compromise on quality. With each of our projects, every tile sample, flooring colour and kitchen design is carefully designed with the prospective purchaser in mind. Therefore, we normally don’t offer any specific upgrade to entice purchasers, as our standards are at such a quality that draws purchasers to our projects. The Altree slogan is “Built with Integrity,” and we aim to live up to that standard with everything that we do.

Investor market

When we first begin designing a project, we do so with all demographics in mind – both end users and investors. I am a firm believer that you cannot solely design/market a project to one demographic, as you never know how the market is going to take to a project. If it caters to multiple markets, when there are changes in the market (such as we’re experiencing now), you know that you have product to offer to the specific demographic that expresses the most significant demand.

Launches and openings

We have several launches scheduled for 2023, and we are going to be monitoring the market to see when the best time is to launch.


Mike Parker, Vice-President, Georgian Communities

People who currently own a home, who do not need to sell for any specific reason, are generally sitting on the sidelines. When considering a new-build that is 12 to 18 months out to completion, prospective buyers must consider: What their current home might sell for in the future; the price of the pre-construction home offered today; and where interest rates will be when it comes time to close, and how those rates will impact affordability and mortgage approval.

There are just too many unknowns right now for most people to make unnecessary moves. First-time homebuyers might be thinking that the apparent cooling of the market will open the door to a home purchase, but they might also feel vulnerable entering the market with no equity from an existing home. Although some home prices have come down, higher interest rates are offsetting purchasing power for some buyers. It’s going to take some time for the overall real estate climate to normalize and provide a reasonable amount of predictability for various buyer profiles.


We took a more conservative approach to our home pricing, and did not react to what we considered to be overinflated pricing in the market during the unprecedented growth leading up to February 2022. Consideration was given to future phase releases at our communities, with a longer-term outlook on how we priced our homes. As a result, we are confident that our buyers who purchased in peak times are still recognizing value on closing and that our current buyers will also recognize value when it comes time to close. We don’t feel the pressure to provide a “better deal” to new buyers at the expense of our previous buyers.


We have historically offered decor credits at all our communities, and we continue to do so. We have not adjusted any of our incentives, however, as we continue to offer standard features and finishes that we feel are at the top of the industry standard.

Investor market

The investor market has never been our niche. Our attention is on building communities with a focus on people and how they want to live and interact. We strive to provide unparalleled lifestyle enriching opportunities when choosing a Georgian community, and our typical buyer is the end user.

Launches and openings

We are continuing to advance all planning to launch two new communities, Victoria Annex in Collingwood and Craighurst Crossing in the village of Craighurst, minutes to north Barrie.


Hunter Milborne, President and CEO, Milborne Group

The market right now is taking longer to make decisions, and buyers typically required more detailed information than the impulse purchase we witnessed in the first quarter of this year and in 2021.

The market may be slower in the next few months, but I believe that early next year, once the Bank of Canada stops raising interest rates, you will see more activity. Then rates will probably fall by summer, to about the mid-point from previous valley to peak.


We have a few promotions going on, such as lower and extended deposits and some adjusted cashbacks at Radio Arts project in Hamilton prime location on new LRT route near Hess Village, King and James, and at the high-end at 7 Dale Ave., the new luxury building on the Rosedale ravine near Castle Frank station in Toronto.


There are no free upgrade on any projects we’re marketing, for now. Many buyers are unaware of how slim development profit margins are. It is increasingly difficult for developers to reduce prices. More often they will postpone a project, which reduces supply and ultimately causes prices to go up when strong demand resumes.


Mark Cohen, Managing Partner, TCS Marketing Systems

The market has been strong over the last couple years. During COVID, real estate demonstrated incredible resilience, and showed unexpected price escalations in and out of the GTA. So many businesses were challenged and consumers were feeling the pinch, yet the resale market was characterized by bidding wars, homes sold well over asking, and most within days of hitting the market. This helped widen the gap between lowrise and highrise prices, making condos even more affordable, despite pressure on builders to sell at higher prices to combat escalating construction costs. Meanwhile, the lowrise market performed well because of the ongoing supply shortage and scarcity of serviceable land. It all was bound to stop.

More recently, with interest rate hikes, a war overseas and general economic sluggishness, the economy and housing markets slowed. People typically don’t buy during such times, hence the current lack in consumer confidence. Interestingly, despite some project launch delays, the builders and vendors that want to sell, are, in fact, selling.

The economic fundamentals for Toronto remain largely bulletproof, given the population growth and the need for housing. My outlook is for a strong market. We’ll bounce back – likely much sooner than many people think.


Incentives are key to sales, as some buyers need to be motivated to purchase during times of uncertainty. They also provide builders with some assurance that sales remain healthy. Buyers may be able to negotiate beneficial terms, such as favourable deposit payment plans, introductory pricing, capped closing costs, the right to tenant their suites when ready, and the right to assign their suites once buildings are substantially sold. In some cases, we’ve seen reduced deposits, reduced parking and locker pricing and mortgage buydowns from builders looking to sell quickly.

Some of the freehold home builders are doing some discounting to move product, largely with much quicker closings, so they can close sales sooner than later.


Not much has changed with upgrades, as builders typically need to offer high level standards to entice buyers, especially in times like these. Some will incorporate upgrade bonuses to motivate buyers and generate quick sales.



Slavica Kovacevic, Founder of SS Tile and Stone

When it comes to new builds, some developers are using more durable and quality updates/finishes in an effort to attract buyers and sell units. Upgrades to flooring, countertops and tiles are a great selling feature.

Examples of upgraded materials include:

  • Using porcelain or quartz countertops instead of laminate. From a product perspective, porcelain offers a more smooth and seamless appearance to provide a cohesive finish.
  • Incorporating more contemporary tiles versus less expensive, basic options. Natural stone slabs in bold colours or patterns can transform a space into a canvas. Natural wood tiles offer a nice minimalistic finish that is also scratch-resistant (a great option to use for the bathroom).
  • Installing porcelain floor tiles instead of ceramic tiles. Great for interior and exterior use, and they don’t absorb or stain.


Vince Anton, Vice-President, Mortgages, Homewise


6- & 12-month pre-approvals:

• Most lenders/banks will offer a 120-day (four-month) pre-approvals
• This puts a strain on some potential buyers as, as rates go up, they want to make sure there are longer rate-guaranteed options
• Some lenders will offer rate guarantees for prospective buyers from six to 12 months
• This provides peace of mind to consumers, especially during a rising interest rate environment
• Rates for five-year fixed term are between 4.89 and 5.19 per cent

Credit unions qualifying only on contract rates:

• With the Stress Test qualification guidelines, lenders/banks are now qualifying consumers based on their contract rate plus two per cent (minimum for some of these qualification rates are 6.39 to 6.59 per cent)
• This puts a strain on consumers, since, as rates continue to climb, their affordability decreases
• With provincially regulated credit unions, if you as a consumer are putting 20 per cent down payment on a purchase, or have more than 20 per cent equity in your property (for refinancing purposes), you have the flexibility to qualify based on the contract rate that is set by the credit union
• Increase the amount of affordability by between $35,000 and $50,000, based on the rate
• Rates for five-year fixed term between 5.99 and 6.69 per cent

Credit unions qualifying only on contract rates:

  • With the Stress Test qualification guidelines, lenders/banks are now qualifying consumers based on their contract rate plus two per cent (minimum for some of these qualification rates are 6.39 to 6.59 per cent)
  • This puts a strain on consumers, since, as rates continue to climb, their affordability decreases
  • With provincially regulated credit unions, if you as a consumer are putting 20 per cent down payment on a purchase, or have more than 20 per cent equity in your property (for refinancing purposes), you have the flexibility to qualify based on the contract rate that is set by the credit union
  • Increase the amount of affordability by between $35,000 and $50,000, based on the rate
  • Rates for five-year fixed term between 5.99 and 6.69 per cent


Business for self-clients who don’t report much income on their taxes:

  • For entrepreneurs who spend a lot of time and money reinvesting in their business, this allows them to claim less income on their income taxes
  • With Prime A lenders/banks, they won’t qualify these types of clients for much on their mortgage
  • Alternative lenders provide a solution for these potential clients by using their last three to six months business bank statements to see how much of income is really coming into the business
  • Allows the buyer to borrow to the maximum affordability set by the alternative lender
  • Typically, the rates are higher for these lenders, along with a one- to 1.5-per-cent fee, based on the mortgage amount needed
  • Rates for one-, two- and three-year fixed term between 5.89 and 6.39 per cent


Best 5-year fixed:
• High ratio: 4.64 per cent
• Conventional insurable: 4.74 per cent
• Uninsurable: 5.14 cent

Best 5-year variable:
• High ratio: 4.3 per cent
• Conventional Insurable: 4.55 per cent
• Uninsurable: 4.9 per cent

About Wayne Karl

Wayne Karl is an award-winning writer and editor with experience in real estate and business. Wayne explores the basics – such as economic fundamentals – you need to examine when buying property.

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