A slow market which has led to significant house price reductions in many regions. Drastic cuts in immigration. Government actions to lower taxes and, in some areas, development charges and fees. Easing construction costs. Lower mortgage rates.

Add all these factors up and potential homebuyers today could pay hundreds of thousands of dollars less for a home compared to costs just a couple of years ago – when historically low interest rates helped fuel a booming for-sale housing market which drove prices drastically higher.

“Now is the best time to buy a house in the last decade,” Justin Sherwood, the COO of BILD, told RENX Homes in an interview. BILD is a development industry organization which tracks new-build housing data in the Greater Toronto region.

Although overall affordability has not dropped to the levels of five or more years ago, and home prices remain out of reach for many, prospective buyers who have been building a nest egg and awaiting their chance might just be in luck.

The housing rollercoaster ride

The rollercoaster ride featured a steep climb, followed by a precipitous fall. With mortgage rates as low as two per cent, average prices for all housing types in Ontario spiked from $650,000 in early 2020 to $1.1 million in January 2022, Ontario Real Estate Association data shows. That has fallen to just over $800,000 as of February.

For example, the benchmark for a new condo in the Greater Toronto Area (GTA) was just over $1 million, and $1.58 million for a single-family home in February 2024, BILD's data shows. In February 2026, condo prices were about the same but single-family home prices had fallen approximately 10 per cent to $1.4 million.

Mortgage rates, after spiking to as high as six per cent, have settled into the four per cent range depending on the institution and product - knocking about $150,000 off the payback on a $400,000 mortgage amortized over 25 years.

That's long-term savings.

The more immediate incentives for buyers have been piling up. In March the Canadian and Ontario governments unveiled a plan to improve affordability through HST rebates on new home purchases and financial relief for municipalities to reduce development charges. It came weeks after the federal government eliminated the GST for first-time homebuyers of many new homes.

In Ontario in particular, one of the hardest-hit housing markets, is it enough to breath life back into the sector?

“I think that is going to help people move off the sidelines,” Cheryl Shindruk, an executive vice-president at Markham-based developer and builder Geranium, told RENX Homes.

Tax cuts make it "great time" to buy new home

The HST cut is designed to move the existing inventory homebuilders were struggling to sell, Jennifer Pearce, owner and broker of REMAX Rouge River Realty in Toronto, told RENX Homes. Prior to the announcement there were just 531 new homes sold in February, BILD said, 76 per cent below the 10-year average for the GTA.

The HST rebate removes the 13 per cent tax for eligible buyers of new homes up to $1 million and extends the maximum $130,000 rebate to new homes valued up to $1.5 million. The GST rebate eliminates the tax for first-time buyers of new homes up to $1 million and reduces it for homes up $1.5 million – saving first-time buyers up to $50,000.

BILD's Sherwood noted housing starts in the GTA have been in the doldrums for years, which is constraining new supply and will lead to less inventory in future years. Under those conditions, “prices go up and they go up quickly,” Sherwood said. In other words, both sales and housing starts must be accelerated.

And anecdotally, Sherwood said he is hearing about increased homebuyer activity in sales centres in recent weeks – a positive sign.

Shindruk and Pearce agree it is a “great time” to buy a home, especially with more moderate interest rates – albeit not as low as during the COVID-19 pandemic.

While investor home buyers are still not celebrating (especially in the condo sector), Pearce said more end-user buyers will likely be more seriously considering entering the market.

The effect of cutting development charges

Ontario homebuilders will be encouraged to start new projects with lower development charges, Pearce said, though she is unsure how much it will affect new home prices. She anticipates many homebuilders will continue to bide their time before putting shovels into the ground, as questions remain about how the incentive will work.

While she praised the development charge cut and noted some municipalities have already moved to slash fees, Shindruk said speeding up development approvals remains a significant barrier to “deliver housing in a timely way.”

To make a lasting mark on new home prices, buyer confidence is paramount, Pearce said. There is still a great deal of uncertainty about whether the price decline will continue, she noted, and also about the trajectory of key factors like the interest rate.

The change to development charges, Sherwood said, will “take some time to work through the system” because it applies solely to new builds. He anticipates it will begin having an impact in some municipalities by the end of this year.

“These policies are intended to create some confidence for buyers and for builders,” Pearce said, though “it remains to be seen if the builders will use the development charge reductions to actually reflect a lower price for the consumer.”