Ontario's new home market saw a sharp rebound in the second quarter after a prolonged period of weak sales raised concerns about a deeper housing-sector downturn, according to a Tuesday report released by the Building Industry and Land Development Association (BILD).
Canadian federal and provincial incentives, particularly the HST tax rebate on eligible new homes, appear to have been a key driver of the recovery in demand, said BILD, citing a Norman Economic Strategies report it commissioned.
New home sales surged roughly 130% year over year in the second quarter, with 4,765 additional sales, almost entirely in the single-family segment, it added.
"To that end, the additional 4,765 home sales in the second quarter alone suggest we are well on track for
the estimated policy impacts," wrote Peter Norman, principal at Norman Economic, in the report.
The additional second-quarter sales are estimated to support or preserve around 17,300 construction-related jobs, generate C$2.8 billion in gross domestic product and contribute about C$1.4 billion in gross government revenue, before accounting for the cost of the incentives, Norman calculated.