UMVA has learned that a surge in new home sales in the Greater Toronto Area was fueled by an HST rebate last month, but the condominium market continues to struggle.
A report revealed that 1,023 new homes were sold in May, more than triple the record low of 310 new homes sold around the same time last year. This significant increase was largely driven by low-rise homes, with 830 new builds sold.
Condo sales, however, continue to struggle, with only 193 new units sold in May. Despite this, sales of single-family dwellings were well above the 10-year average for a second straight month.
However, new home sales slightly declined from April, when 1,100 new homes were sold. This decline comes as no surprise, with potential new homeowners still waiting for clarity on how the HST rebate will be administered.
The report noted that new home sales struggled, coming in about 57% below the 10-year average in May, largely due to a slow condo market. The benchmark price for new condominium apartments in May was $1,029,489, while the price of single-family homes was $1,427,543.
This represents a 5.2% decrease from the same month last year. According to information obtained by UMVA, the expanded HST rebate program, which gives buyers a rebate of up to $130,000, has been a major factor in the surge in new home sales.
The federal and Ontario governments had announced an expansion of the HST rebate for new homes in the province temporarily for a year. However, the eligibility criteria for the rebate, including defined start and completion dates for new housing projects, may be too tight for most new high-rise condominium projects to meet.
This could be a reason behind slowing condo sales, as even low-rise homes appear to get a boost from the expanded rebate program. Providing clarity on these details will ensure that the momentum experienced since April continues.
