Toronto developers in Canada's largest Condo market are now dealing with an economic slowdown as well as new government regulations and taxes like Toronto's New Land Transfer Tax.

The new HST, Harmonized Sales Tax, will 8 per cent to the price of any new home on top of 5 per cent already paid.

Developers have tried to stimulate this slower market with cash-back discounts and other inventive's such as free parking, and reducing mortgage rates by contributing cash.

Urbanation Inc, a research company says over 60 per cent of Toronto Condo sites are now offering sales incentives but even more sales incentives such as lower prices per square foot may be needed.

Toronto had 36,255 Condo units under construction during the first quarter of 2009 but Toronto builders are already starting to slow down.

In this first quarter of 2009, only 917 Condo units were sold in the Toronto census area, the lowest since the first quarter of 2006 and far off the record set when 4,000 units sold eery quarter at the height of the Toronto Condo Market.

While the current lower mortgage rates provide incentive for home buyers, those rates will not be as low when buying a new Condominiums that will not be built for at least two more years.