Canadian real estate developers are finding ways to sweeten the deal for prospective homebuyers as new home sales slump across the country.

From steep discounts to a year of free mortgage payments, builders are betting that promotions will get skeptical homebuyers off the fence. Mattamy Homes last week announced a program to cover buyers’ mortgage payments for a year, to a maximum of almost $50,000, for sales in Calgary and Edmonton.

Justin Sherwood, chief operating officer of the Building Industry and Land Development Association in the Greater Toronto Area, said incentives to pull consumers into the housing market are “exactly what we need right now.”

“We’re seeing programs to get buyers off the sidelines and provide them a degree of confidence in what is usually the biggest purchase anyone will make in their lifetime – a new home,” he said.

Mr. Sherwood said he expects enhanced offers to be “very, very well received at the moment,” adding that 2025 marked the worst year for new home sales in the GTA since his organization started keeping records in 1981.

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In the GTA, new home sales were down 81 per cent in 2025 compared with average sales between 2016 and 2025, according to an Altus Group report studying sales of new single-family homes and condo apartments in select Canadian markets. By that same measure, Vancouver and Montreal also took major hits, with data showing new home sales down 70 per cent in the former, and sales of new apartments down 70 per cent in the latter.

Edmonton and Calgary were the least affected of the markets included in the report, with declines of 40 per cent and 42 per cent, respectively, in 2025, compared with the average for 2016-25, for combined sales of townhouses and apartments.

Last week, the Alberta division of Mattamy Homes offered to cover homebuyers’ mortgage payments for the first year, up to a maximum of $4,150 a month. All Mattamy homes built in Alberta that are ready for occupancy by the end of the year are eligible for the promotion.

Because the upper limit for the program is set at $50,000, a home priced at approximately $1,017,000 would enable a buyer to get the maximum benefit, according to the builder.

The real estate developer has been seeing a steady increase in sales, so the free mortgage offer is an effort to compete with other builders, David Wan, vice-president of sales for Mattamy Homes Alberta, said in an interview.

Mr. Wan said most of the builder’s sales come from first-time homebuyers, who face the “greatest challenge” achieving affordable home ownership. Many of Mattamy’s customers have reported moving into a home but leaving it unfurnished for up to a few years, he said.

“We wanted to find a tangible way to help people remove the uncertainty behind taking that plunge,” Mr. Wan said. “We felt this was a pragmatic way to address the issues around homebuying.”

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Mattamy may consider a similar promotion in other parts of the country depending on the program’s success in Alberta, as first-time homebuyers face similar problems in other jurisdictions, he added.

Mattamy isn’t the only builder pulling out extra stops for potential purchasers. In September, 2025, Southern Ontario builder Greenpark announced a promotion that would let buyers at Aquanova, a new high-rise in Mississauga, “live mortgage-free for up to 30 months.” In June, 2025, prospective buyers lined a block in Surrey, B.C., for a Square Nine Developments flash sale offering units at a 25-per-cent discount.

Increased perks can move the needle for developers as consumer confidence falters, and as new home sales drop “precipitously,” said Kevin Lee, chief executive officer of the Canadian Home Builders’ Association.

“Like with any business, companies are trying to get creative to entice buyers,” Mr. Lee said.

Last year, he said, more than 13,500 units across the country were sitting unsold at the time of completion, which he said marked the highest figure in 25 years.

Mr. Lee added that as high costs for materials and labour squeeze developers, finding room for promotions can be difficult.

“Margins are thin as is, and it’s tough to do much to reduce costs,” he said.

He added those slim financial cushions are largely responsible for lower numbers of housing starts. Mr. Lee predicts promotions from real estate developers will ebb and flow, but he expects construction to take even more of a hit in coming years.

“Frankly, if you can’t sell the house, you can’t build it, in a lot of cases,” he said. “We are in a tough market that way.”