Canada Housing Market

Ontario’s new HST rebate appears to be giving the Greater Toronto Area’s struggling new home market a much-needed boost.

New data released by the Building Industry and Land Development Association (BILD) shows new home sales remained stronger than expected in May, marking the second consecutive month that low-rise home sales outperformed their 10-year average.

Industry experts say the province’s recently expanded HST rebate program is playing a major role in improving buyer interest.

GTA New Home Sales Improved In May

According to Altus Group data published by BILD, a total of 1,023 new homes were sold across the GTA in May 2026.

While sales were still 57% below the historical 10-year average of 2,353 units for the month, the results represented a significant improvement from the record-low sales levels seen one year earlier.

The market’s strongest performance came from the low-rise segment, which includes detached, semi-detached, and townhome properties.

Single-Family Homes Are Leading The Recovery

Of the 1,023 new home sales recorded in May:

• 830 were single-family homes
• 193 were condominium apartments

According to BILD, single-family home sales finished 26% above the 10-year average for May.

Edward Jegg, Research Manager at Altus Group, said buyers appear to be responding positively to the HST rebate program introduced earlier this spring.

The rebound marks the second consecutive month in which low-rise sales exceeded long-term norms.

Condo Sales Continue To Struggle

While low-rise housing has benefited from the rebate program, condo sales remain weak.

BILD reported that condominium apartment sales were 89% below the 10-year average in May.

Industry experts say several factors are limiting the effectiveness of the rebate in the condo sector.

Many projects are still carrying higher legacy pricing from the peak of the market, while some future developments may not meet the completion requirements necessary to qualify for the rebate.

As a result, the incentive appears to be helping low-rise housing much more than condominium projects.

What Is Ontario’s New HST Rebate?

Earlier this year, Ontario and the federal government expanded HST rebates on qualifying new homes.

The program removes the full 13% HST on eligible new homes valued up to $1 million and can provide rebates of up to $130,000.

The rebate gradually phases out on homes priced above $1 million.

The initiative was introduced as part of Ontario’s efforts to improve housing affordability and stimulate activity in the new home construction sector.

Inventory Remains Elevated

Despite improving sales activity, inventory levels remain high.

At the end of May, the GTA had 18,763 unsold new homes available, including:

• 13,138 condominium units
• 5,625 single-family homes

According to BILD, that represents approximately 32 months of inventory based on current sales levels.

However, the industry group says inventory levels could begin falling more quickly if sales continue to improve throughout the summer.

Buyers May Still Be Waiting For More Details

Industry representatives believe some potential buyers remain on the sidelines due to uncertainty surrounding how the rebate will ultimately be administered.

Justin Sherwood, Chief Operating Officer of BILD, said providing additional clarity around the program could help maintain the momentum that began after the rebate was announced.

For now, the latest data suggests the incentive is having a measurable impact on parts of the GTA’s new home market, particularly among buyers considering low-rise housing.

Whether the program can produce a broader recovery across the entire new construction sector remains to be seen.

References

Paglinawan, D. (2026, June 22). HST rebate helps drive Toronto new home sales in May, report says. Financial Post. https://financialpost.com/real-estate/hst-rebate-helps-drive-toronto-new-home-sales-in-may-report-says

Building Industry and Land Development Association. (2026, June). GTA new home market report: May 2026. BILD. https://www.bildgta.ca

Altus Group. (2026, June). Greater Toronto Area new home market statistics. Altus Group. https://www.altusgroup.com

Government of Ontario. (2026). Ontario new home HST rebate expansion. Government of Ontario. https://www.ontario.ca/page/ontario-budget-2026