It looks like the HST rebate on new homes is working

In March, Prime Minister Mark Carney, Premier Doug Ford and Mayor Olivia Chow announced an $8.8-billion deal that included slashing the 13 per cent HST on all new home purchases. The policy was designed to help buyers save up to $130,000 on new residences valued under $1.5 million. Now, a new report suggests that the move is making waves in the GTHA real estate market.

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The Building Industry and Land Development Association said Wednesday that 1,100 new homes sold in April, a healthy increase from the paltry 384 sold during the same period last year. The purchases comprised 901 single-family homes and 199 condos. Single-family home sales surpassed the 10-year average of 744 for the first time since 2023.

Still, total home sales were 55 per cent below the 10-year average of 2,418. The high-rise market in particular continues to struggle, with condo sales 88 per cent below the 10-year average of 5,751.

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“April new home sales responded to the new HST rebate program as sales showed a noticeable increase,” said Edward Jegg of Altus Group, a research manager on the report. “Pricing continued to be competitive, with nearly like-for-like prices before and after the introduction of the rebate, suggesting the full rebate was flowing through to consumers.”

Jegg went on to say that April’s surge is expected to continue thanks to pent-up demand—especially as more prospective buyers learn about the HST rebate.