In a recent discussion, Benjamin Tal, deputy chief economist of CIBC World Markets Inc., said loud and clear that as far as new housing goes, we are in a buyers’ market. Developers and builders are arming us with incentives and negotiating as we sell down inventory. Our industry is building very little at present, so when we get through the existing inventory, there will be demand and no supply. Bank of Canada interest rates have been on a downward pathway, and three banks recently dropped their five-year fixed mortgage rate to 3.9 per cent. With lower mortgages, investors will be back and prices will go up again. The time to buy is 2025, when there are amazing deals to be had.

Reduction in development charges

There is also good news coming from GTA municipalities, some of which are finally listening to builders, developers and other experts asking for a reduction of the exorbitant development charges on new homes and condominiums. The first example is the City of Burlington, which conducted a Development Charges Background Study last year and in May 2024, lowered development charges to spur new housing builds. An unprecedented decision speaks well to the City’s commitment to remain an inclusive and accessible place for everyone.

In November 2024, the City of Vaughan dramatically reduced development charge rates across the board. The Building Industry and Land Development Association (BILD) applauded the City of Vaughan for adopting a new Development Charges Rate Reduction and Deferral Policy. “BILD recognizes and commends Mayor Del Duca and the City of Vaughan for taking bold action to address housing supply and the cost to build by lowering development charges,” says Dave Wilkes, president and CEO of BILD.

The City of Mississauga has temporarily reduced development charges as well, by 50 per cent, and by 100 per cent for three-bedroom units in purpose-built rental buildings. In addition, Mississauga City Council will defer the collection of residential development charges for all residential developments and collect them at occupancy. “The City of Mississauga is walking the walk when it comes to new housing… We would also like to acknowledge and thank the federal government for its direct financial support of Mississauga’s efforts,” says Wilkes. “We encourage all regions, cities and towns in the GTA to follow the vision and lead of Mississauga.”

Positive factor

Of course, lower mortgage interest rates are a positive factor in addressing housing affordability, but for new housing, we need more than reductions in development charges. With the federal government offering incentives for municipalities to act in efforts to ease housing affordability and supply, we should see more action from local governments. However, we also need reductions in approvals timelines. Usually these involve the builder/developer submitting detailed plans to the appropriate municipalities, as well as city staff reviews, public consultation meetings and a council vote. This can take up to two years and more, which results in home prices becoming even higher.

Sometimes needed change takes time to filter through our systems. The fact remains that anyone thinking of purchasing a new home or condo would be wise to act sooner rather than later.