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.