Sales stayed near record lows despite a powerful new HST incentive
New home sales in the Greater Toronto Area in February 2026 inched off the floor but remained near historic lows, even as policymakers moved to slash the harmonized sales tax on new builds and industry groups talked up a window of opportunity for buyers.
Altus Group data for the Building Industry and Land Development Association (BILD) showed 531 new home sales in February. That's up 16% from a year earlier yet still 76% below the 10‑year average of 2,251 units for the month.
Condominium apartments accounted for just 171 of those deals, 88% under their decade norm, while 360 single‑family homes sold, 57% below trend.
“New home sales in February 2026 continued to fall well short of historic norms with only a modest increase from the previous year’s record low for the month,” said Edward Jegg, research manager at Altus Group.
“A stable interest rate environment coupled with elevated inventory levels present potential buyers with plenty of opportunity to buy a new home. However, persistent concerns around affordability and geopolitical tensions continue to weigh on buyers’ minds.”
Inventory stayed high at 20,291 units, or about 27 months of supply based on the past year’s sales.
Benchmark prices underlined a market that cooled but not corrected outright: new condo apartments held at $1,022,063, while new single‑family homes sat at $1,423,219, down 7.4% year over year.
BILD also cited an average price decline of “over 20% since 2022” for new homes across the region, a figure that had not been independently verified.
Tax relief collides with weak demand
The sales update came days after Ontario and the federal government unveiled a temporary, one‑year HST holiday and reduction package for qualifying new homes, building on earlier first‑time buyer GST and HST rebates.
Ontario homebuyers are set to see a rare tax break on new construction, with the province proposing to remove the full 13% Harmonized Sales Tax (HST) on eligible new homes for one year in partnership with Ottawa.https://t.co/9gHPlj8wY5
— Canadian Mortgage Professional Magazine (@CMPmagazine) March 26, 2026
“With the temporary harmonized sales tax cut announced last week by the Ontario and federal governments for all new home buyers, now is truly the best time in a decade for those looking to buy a new home to get into the market,” said Justin Sherwood, chief operating officer at BILD.
“The suspension of the harmonized sales tax on new homes under $1 million and further HST reductions on homes from $1 million to $1.85 million, combined with housing prices having moderated over 20% on average since 2022, and unparalleled product choice due to high inventory level – homebuyers have a historic opportunity to enter the market. Now really is the time for those wishing to buy a new home to take advantage of current market conditions and the time‑bound tax relief.”
Developers face shifting construction outlook
The muted sales backdrop aligns with national forecasts. In its latest housing market outlook, Canada Mortgage and Housing Corporation projected that new construction would remain below historical averages through 2028, with Ontario and particularly the GTA condo sector under pressure from higher costs, weak pre‑construction sales and growing inventories of unsold units.
CMHC’s warned that developers already began delaying or cancelling projects as financing thresholds became harder to meet, even as governments pressed for more supply.
Regional variations persisted. In Simcoe County, north of the GTA, February saw 34 single‑family new home sales and a single condo apartment sale, at a weighted average single‑family price of $1,153,653.
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