New home sales were “extremely” low in April, new data shows, and Toronto builders say the federal government’s proposed relief for first-time buyers won’t be enough to revive the market.
The Building Industry and Land Development Association, the voice of 1,000 member companies in building, land development and renovations in the Greater Toronto Area, said Wednesday that new home sales are at all-time lows, eclipsing the 1990 downturn.
There were 310 new home sales in April, down 72 per cent year-over-year and 89 per cent below the 10-year average, according to BILD’s data analytics partner Altus Group.
Of the new home sales, 105 were condos and 205 were single-family homes.
Historically, new home sales for a typical April in the GTA would be 2,750 units, based on the previous 10-year average.
“Buyers crave predictability and the swirling uncertainty around the impact of possible tariffs is depriving would-be purchasers of the confidence they need to move ahead,” said Edward Jegg, research manager at Altus Group.
Federal measures lacking, industry says
This week, the federal government tabled its proposed measures to provide GST(HST) relief to first-time new home buyers.
BILD spokesperson Justin Sherwood says this isn’t enough.
“Unfortunately, this limitation to first-time buyers only will have a very small impact, as very few new home buyers are first-time buyers,” said Sherwood.
“It will not substantially help address affordability, nor will it help significantly stimulate sales and construction.”
For maximum impact, the government must broaden the scope of the GST (HST) measures to all new home purchases, Sherwood said.
GST (HST) policy details
According to the government, the new measure seeks to eliminate GST for first-time home buyers on new homes up to $1 million, and reduce the GST for first-time home buyers on new homes between $1 million and $1.5 million.
As a result of the rebate, first-time home buyers will be able to save up to $50,000.
Open letter to Carney
Coinciding with news of the rebate, industry leaders published an open letter to Prime Minister Mark Carney calling for greater reform to address market uncertainty.
The letter calls asks for the rebate thresholds to be “adequate” to deal with the country’s most expensive areas, and for the GST exemption to extend to all new home purchasers, not just first timers, among other requests.
The letter was signed by leaders from: BILD, Canmore Community Housing, Canadian Home Builders’ Association, Habitat For Humanity Canada, Missing Middle Initiative, Options for Homes, Polygon Homes Ltd., and Wesgroup Properties.
Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.
Facts are real estate in Canada is getting too expensive. And a GST/HST reduction is an insignificant piece of the problems. And if one can afford a $1.5 million dollar home then $55,000 should not be a problem. Land is too expensive, materials are too expensive, soft costs are too expensive and labor is too expensive. And consider current market conditions. In a declining market by the time a new home is competed for occupancy that home may have already lost 10-20 % of its value. Best to let the recession hit, take care of how over valued everything in our society has become and then restart from the bottom. The introduction of easy available money has created a credit society. That credit society cannot continue on an upward trend for ever. The result is most of that money goes into fewer hands which is now creating that gap between the ones that have and the have nots.
Right on! The value Jist isn’t there and finally people are saying no! It’s not worth the price. Bank appraisers should have halted this long ago. Now most realtors say supply and demand drive the price. Well let’s see how the condo slump panes out. Overbuilt and buyers realizing $12k-$20K per year for taxes and condo fees for a shoebox isn’t a good investment.