HST Rebate Boosts New Home Sales in Greater Toronto Area, but Condo Market Lags
A new report from the Building Industry and Property Development Association (BILD) reveals that the federal and Ontario governments’ temporary HST rebate on new homes has helped drive a significant rebound in new home sales across the Greater Toronto Area (GTA) in May 2026—though the high-rise condominium sector continues to face persistent challenges.
Strong Rebound in Low-Rise Home Sales
According to the BILD report published on Monday, 1,023 new homes were sold in May—more than three times the record low of 310 units sold during the same period last year. Of these, 830 were low-rise homes, defined as properties ranging from one to four stories, such as detached houses, townhomes, and low-rise townhouses.
Single-family home sales remained well above the 10-year average for the second consecutive month, though they dipped slightly from April’s total of 1,100 units. Despite this modest decline, overall new home sales in May still came in approximately 57% below the 10-year average, largely due to continued weakness in the condo segment.
Condo Market Struggles Persist
Only 193 new condominium units were sold in May, underscoring ongoing difficulties in the high-rise sector. BILD Chief Operating Officer Justin Sherwood attributed the sluggish condo market to several factors: elevated inventory levels, a price floor that limits downward adjustments, and extremely low new product launches—with just one new condo project introduced in all of 2026 so far.
“In the high-rise sector, condos continue to struggle with higher inventory, a price floor and very low new product launches,” Sherwood said in a media release. He added that potential buyers are also awaiting clearer guidance on how the HST rebate will be administered, which may be contributing to hesitation even among low-rise purchasers.
HST Rebate Details and Eligibility Concerns
In March, the federal and Ontario governments announced a one-year extension of the HST rebate program for new homes in the province, offering eligible buyers a discount of up to $130,000. However, Sherwood noted that the program’s eligibility criteria—including defined start and completion dates for new residential projects—are too restrictive for most high-rise condominium developments to qualify.
“Providing clarity on these details will ensure that the momentum seen since April continues,” Sherwood emphasized, suggesting that clearer rules could help sustain the recent sales uptick and potentially extend benefits to the struggling condo segment.
Price Trends Show Divergence
BILD data highlights a notable price divergence between housing types. The average guide price for new condos in May was $1,029,489, while single-family homes averaged $1,427,543—a 5.2% decrease compared to the same month last year. This decline in single-family pricing, combined with the HST rebate, appears to be making low-rise options more attractive to buyers amid broader market uncertainty.
As the GTA housing market navigates shifting policy landscapes and buyer sentiment, the effectiveness of targeted incentives like the HST rebate remains a key factor in shaping recovery trajectories—particularly as stakeholders await further administrative clarity to unlock broader participation.
