Ontario Pre-Construction Market Note: HST Rebate Lifts Q2 Sales

Market note — August 11, 2026

Three developments this week matter to Ontario pre-construction buyers and investors: new sales data tied to the enhanced HST rebate, a large federal-municipal rental deal in Toronto, and a steady interest-rate backdrop. Here is what was announced and how it lines up with what we are seeing on our platform.

New-home sales rose 130% in Q2, credited to the HST rebate

New home sales across Ontario rose 130 per cent year-over-year in the second quarter of 2026, according to the Building Industry and Land Development Association (BILD) and the Ontario Home Builders' Association (OHBA). The industry attributes the move to policy: the provincial-federal enhanced HST rebate program, which began on April 1 and took full effect in late June.

BILD framed the scale of activity. "It is incredibly positive to know that 4,765 families across Ontario were able to purchase new homes as a result of the enhanced HST rebate program," said Justin Sherwood, Chief Operating Officer of BILD.

What the rebate actually covers

The enhancement is temporary and tied to specific dates. The rebate is proposed to be available for one year — from April 1, 2026 to March 31, 2027 — and the agreement of purchase and sale must be entered into during that window.

It applies to all eligible buyers, not only first-time buyers. On amounts:

• At or below $1,000,000: the full 13% HST may be rebated.
• $1,000,000 to $1,500,000: the maximum rebate is $130,000.
• $1,500,000 to $1,850,000: the rebate declines proportionally to a floor of $24,000.
• Over $1,850,000: the existing $24,000 maximum only.

One practical note for closings: these do not all automatically stack — some relief may be the greater of the available amounts rather than a pile-on of every headline number. This is legal and tax territory, so confirm eligibility with your own advisors rather than assuming the advertised after-rebate price.

Where LIQWD's tracked inventory sits

Against that backdrop, our platform shows breadth across price points. Toronto currently has 121 active listed projects (9 newly listed in the last 30 days), followed by Brampton at 55, Mississauga 54, Markham 41 and Richmond Hill 40.

Starting prices among tracked projects range widely by market — from $390,900 in Mississauga and $399,990 in Richmond Hill up to $661,990 in Markham. These are our platform's listings, not the full market.

A $2.7B rental push in Toronto

On the supply side, government financing headlined the week. Canada and the City of Toronto announced a new partnership to unlock 18 housing projects delivering more than 5,600 rental homes across Toronto, including affordable, supportive, rent-geared-to-income and rent-controlled housing.

The mechanics: more than $1.8 billion in low-cost financing through the Apartment Construction Loan Program for nine purpose-built rental projects, plus up to $600 million in additional financing for future Toronto projects that meet program requirements. Construction is expected to begin on more than 4,500 homes across the partnership portfolio before the end of 2026.

This is rental supply rather than for-sale condo stock, but it signals where public financing is currently flowing.

Rates held; construction still soft

The rate backdrop is unchanged. The Bank of Canada is holding its interest rate at 2.25%, with the next scheduled announcement on Wednesday, September 2, 2026.

The construction pipeline, meanwhile, remains under pressure. CMHC projects overall Ontario housing starts to fall to near two-decade lows in 2026, driven by very low condominium pre-construction sales, and has flagged that developers face high construction costs, weaker demand and rising inventories of unsold units.

There was one nearer-term bright spot: in the June release, Toronto starts increased 25% on higher multi-unit starts. CMHC's next data drop is worth watching — it will release July housing starts on August 18 at 8:15 AM.

Net read for buyers: policy incentives and stable rates are supporting transactions, while new-supply conditions stay constrained. None of the above is a forecast or a promise of returns — verify any rebate eligibility and project specifics with qualified advisors before committing.

Sources

• https://www.globenewswire.com/news-release/2026/08/11/3342501/0/en/new-home-sales-across-ontario-see-positive-uptick-in-q2-thanks-to-hst-rebate-program.html
• https://www.airdberlis.com/insights/publications/publication/2026-ontario-budget--enhanced-hst-relief-on-new-homes
• https://www.nihanglaw.ca/blog-ontario-hst-rebate-new-homes-2026/
• https://buildersontario.com/ontario-new-home-hst/
• https://www.canada.ca/en/housing-infrastructure-communities/news/2026/08/canada-and-toronto-announce-new-partnership-to-build-thousands-of-new-homes.html
• https://www.rbcroyalbank.com/en-ca/my-money-matters/money-academy/economics-101/understanding-interest-rates/bank-of-canada-interest-rate-announcement/
• https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/housing-market/housing-market-outlook
• https://www.cmhc-schl.gc.ca/media-newsroom/news-releases/2026/housing-starts-june-2026