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Market Insight for October 31
The province’s proposal, which will be included in the 2025 Fall Economic Statement, would save first-time home buyers up to $80,000 off the cost of a new home when combined with existing provincial relief.
The province is matching the federal government’s proposed removal of its five per cent portion of the HST — which would save up to $50,000 off the cost of a new home — for savings of up to $130,000.
Ontario will work with the federal government to propose that the new Ontario rebate be available if the agreement of purchase and sale for the home is entered into with the builder on or after May 27, 2025, and before 2031. Construction of the home must begin before 2031, and the home must be substantially completed before 2036.
Other eligibility criteria for the new Ontario rebate would follow those set by the federal government, including that the individual must be buying the new home for use as their primary place of residence.
In a statement, Ontario Real Estate Association (OREA) president Cathy Polan called the plan a “step in the right direction for the future of this province.”
She said this type of action “is exactly what we need to help young Ontarians and their families get a foot on the homeownership ladder.”
While the Bank of Canada cut the key interest rate on Wednesday to 2.25 per cent, the five-year Government of Canada bond yield, which is what fixed rates are based on, actually went up.
On the rate relief side, it’s still tough for those first-time buyers. The borrowing environment is still the biggest factor that’s causing first-time buyers, and even investors, to wait on the sidelines.
First-time buyers make up about 35 per cent of new home purchases, but they’ve been especially affected as the housing-cost-to-income ratio has climbed well above historic norms in recent years.
This initiative aims to help keep young professionals and families from moving away from the Greater Toronto Area and the province.