Ontario Pre-Construction Note: Rates, HST & Supply — August 2026

The week at a glance

Three forces are defining Ontario's new-construction market this month: a steady interest-rate backdrop, active affordability policy, and a supply picture that is tightening even as buyer activity stays historically low. Here's where things stand — and how it maps to what we're tracking on LIQWD.

Rates: held again, next decision September 2

The Bank of Canada is a fixed input for now. <cite index="8-1,8-2">For the sixth time in a row, the central bank held its interest rate steady at 2.25% on July 15.</cite> In its statement, <cite index="9-4,9-5,9-6">the Bank said Canada's economy has been weak but is showing signs of improvement, that growth is expected to pick up and inflation is projected to ease to around 2%, while uncertainty remains elevated.</cite>

For buyers, the takeaway is stability, not change. A hold means variable-rate borrowing costs are unchanged this cycle; we don't forecast where rates go next. <cite index="6-3">The next Bank of Canada interest rate announcement is Wednesday, September 2, 2026.</cite>

Policy: HST relief and development-charge cuts are in effect

Two affordability measures announced earlier this year are now shaping the math on new builds. <cite index="18-5,18-6">The Canada-Ontario partnership includes the temporary removal of the full HST on new homes between April 1, 2026 and March 31, 2027, which governments estimate could save homebuyers up to $130,000 on a newly built home, in addition to savings from development-charge reductions.</cite>

On development charges, the structure matters for pre-construction buyers specifically. <cite index="22-9">Participation is voluntary, municipalities have to cut their DC rates by 30 to 50% for three years, and program funding is paid out over 10 years.</cite> In Toronto, <cite index="18-1">the funding recognizes the city's commitment to reducing development charges by between 40 and 60 per cent across a range of residential housing types for a minimum of three years.</cite> Because relief is set municipality-by-municipality, confirm what a specific city and project type actually qualifies for before pricing in savings.

One caution on the HST rebate timeline: <cite index="29-2">the rebate requires construction to start before March 31, 2027 and be substantially completed by December 31, 2029, creating a real risk that some pre-construction buyers won't qualify.</cite> If you're relying on that rebate, check completion timelines carefully.

Supply: launches have stalled, inventory is thinning

The latest GTHA data shows a market pulling off its lows with a shrinking pipeline. <cite index="27-2">New condominium apartment sales in the GTHA increased 52% annually to 702 units in Q2-2026, the first year-over-year gain since Q3-2023, as the elimination of HST and bulk investor buying helped pull the market up from its 35-year lows.</cite> But the gain was concentrated: <cite index="27-5">pre-construction sales moved in the opposite direction, dropping 80% annually to just 50 units.</cite>

On new supply, the pipeline has essentially paused. <cite index="30-1">There were no new project launches for a second consecutive quarter, while another 1,022 units were cancelled, bringing the total number of cancelled units since the beginning of 2024 to 11,653.</cite> More broadly, <cite index="11-16">Ontario's overall housing starts are projected to fall to near two-decade lows in 2026, driven by very low condominium pre-construction sales.</cite>

What we're seeing on LIQWD

Against that backdrop, our platform's tracked inventory shows steady new listing activity across the GTA. As of August 5, 2026, LIQWD's tracked inventory includes:

• Toronto: 121 active projects (26 newly listed in the last 30 days, from $1,901)
• Brampton: 55 active (36 new, from $419,990)
• Mississauga: 54 active (4 new, from $390,900)
• Old Toronto: 47 active (34 new, from $350,990)

In the 905 and adjacent submarkets:

• Markham: 41 active (17 new, from $661,990)
• Richmond Hill: 40 active (27 new, from $399,990)
• Oakville: 37 active (25 new, from $389,900)

For buyers comparing across the border, LIQWD also tracks 55 active projects in Miami (18 new, from $300,000).

The pattern to note: a meaningful share of these are newly listed within 30 days, even as region-wide launches have stalled. Before committing, verify each project's construction start and completion dates against the HST-rebate window.

Sources

• https://stories.td.com/ca/en/article/bank-of-canada-interest-rate-july-2026
• https://www.bankofcanada.ca/2026/07/fad-press-release-2026-07-15/
• https://www.rbcroyalbank.com/en-ca/my-money-matters/money-academy/economics-101/understanding-interest-rates/bank-of-canada-interest-rate-announcement/
• https://www.wireservice.ca/ontario-ottawa-commit-1-5-billion-to-cut-toronto-development-charges-and-boost-housing-construction/
• https://www.amo.on.ca/policy/finance-infrastructure-and-economy/canada-ontario-development-charge-reduction-program
• https://www.urbanation.ca/news/gtha-new-condo-sales-increase-over-50-q2
• https://www.cp24.com/local/toronto/2026/07/20/new-condo-sales-in-the-gtha-rose-last-quarter-and-supply-now-thinning-quickly-amid-slowdown-in-construction-report/
• https://realestatemagazine.ca/new-condo-sales-climb-50-in-toronto-and-hamilton-but-pipeline-keeps-shrinking/
• https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-and-research/market-reports/housing-market/housing-market-outlook