HST Rebate Fuels GTA Sales
GTA Low-Rise Home Sales Beat Decade Average Again, Thanks to HST Rebate
Anonymous
Low-rise new home sales in the Greater Toronto Area beat their 10-year average for the second month in a row in May, driven by a historic HST rebate that can save buyers up to $130,000 on a new home, according to BILD. But the broader market tells a mixed story: total new home sales of 1,023 units still sit 57% below the decade average, and condo sales have collapsed 89% below normal levels.
The gains are almost entirely a low-rise story. Single-family homes and townhouses sold 830 units in May — 26% above the 10-year average. Condominiums, by contrast, managed just 193 sales, according to BILD and Altus Group.
HST Rebate Creates a One-Year Window Worth $130,000
Ontario's 2026 budget launched a temporary HST rebate on April 1, covering the full 13% tax on new homes priced up to $1 million. On a $1 million home, that means savings of up to $130,000. The program runs until March 31, 2027, according to True North Mortgage.
Low-rise builders moved fastest to take advantage. Their projects can meet the rebate's "substantial completion" deadline. High-rise condo towers, which take years to build, mostly cannot. That structural difference explains why the two markets are moving in completely opposite directions right now.
Federal Delay Left Buyers Frozen for Two Months
The rebate launched April 1, but the federal law backing it — Bill C-26, the Improving Housing Supply Act — did not receive Royal Assent until June 18. For nearly two months, buyers were unsure whether the federal 5% portion of the rebate was legally guaranteed. Many delayed signing or closing on homes.
Ontario Housing Minister Rob Flack grew frustrated with the lag. "Every day is a wasted day," he said in late May, demanding Ottawa move faster to pass the regulation. BILD's Chief Operating Officer Justin Sherwood echoed that, saying, "It is now imperative the government provide clarity as quickly as possible on the program details... to allow builders and buyers to seamlessly implement the HST rebate," according to REMI Network.
Condo Market in Freefall as Low-Rise Recovers
The condo numbers are stark. The benchmark price for a new condo apartment in May hit $1,029,489 — down 52% in the past 12 months, according to BILD. Just 193 condo units sold, compared to a 10-year monthly average roughly nine times that size. Analysts at TD Economics say the condo market is in a "long correction" that may not bottom out until 2027.
Total remaining new home inventory dipped to 18,763 units — below 20,000 for just the third time in two years. Edward Jegg, Research Manager at Altus Group, said "pricing continued to be competitive," suggesting the full rebate was flowing through to consumers. But he also pointed to "pent-up demand" built during the worst sales slump on record, when May 2025 saw just 345 total new homes sold.
Sunset Clause Could Trigger a Sharp Drop-Off in 2027
The rebate's March 31, 2027 expiry date worries analysts. Economists expect a massive rush of buying in early 2027 as the deadline approaches — followed by a sharp drop-off in April if the policy is not extended. Some critics also argue the rebate primarily helps wealthier buyers and investors, doing little for first-time buyers shopping in the condo segment, the Toronto Star has reported.
For now, low-rise buyers hold a narrowing window. Inventory is falling and demand is rising. Mike Schreiner, Ontario Green Party leader, captured the confusion many buyers still feel, noting that constituents were asking, "Should I buy a house right now or not?" The answer, for the moment, appears to be yes — but only if you act before March 2027.
Sentiment
NeutralNEGATIVENEUTRALPOSITIVE
Publishers
7
Articles
6
Reach
7
Topics
A
AnonymousAuthor
