Ottawa's new-home shoppers have reason to pay attention to the latest housing numbers coming out of Queen's Park. According to a new report from the Toronto Star, new home sales across Ontario have jumped following a cut to the province's portion of the HST, giving the province's housing market a noticeable lift after a stretch of soft demand.
What happened
The Toronto Star reports that new home sales in Ontario rose after the provincial government reduced its share of the HST. While the report doesn't break the numbers down city by city, the trend points to buyers responding directly to lower upfront costs on newly built homes — a segment of the market that's been especially hard-hit in recent years as high interest rates and construction costs kept many would-be buyers on the sidelines.
Why it matters for Ottawa
Ottawa has its own sizeable pipeline of new-build communities, from growing suburbs like Barrhaven, Findlay Creek and Kanata West to infill condo and townhome developments closer to the core. Any provincewide shift in new home sales activity is worth watching here, since Ottawa builders and buyers operate under the same HST framework as the rest of Ontario. A cut that makes new construction more affordable elsewhere in the province is likely to be felt in Ottawa's new-build market too, particularly for first-time buyers and young families who've been priced out of resale homes in established neighbourhoods.
For Ottawa residents who've been sitting on the fence about buying new construction, a provincial policy change like this can shift the math on affordability, even if only modestly. Local builders, who've had to navigate rising costs for materials and labour over the past few years, may also welcome any signal of renewed buyer interest heading into the next selling season.
The bigger picture
Housing affordability has been one of the dominant local and provincial issues of the past several years, and Ottawa is no exception — the city has seen its own debates over zoning, density and the pace of new construction as council works to meet housing targets. A policy change at the provincial level that appears to be moving the needle on new home sales adds another data point to that ongoing conversation, and it's one Ottawa homebuyers, sellers and builders alike will likely be watching closely in the months ahead.
As always with province-wide housing data, the real test will be whether the momentum holds and whether it translates into more construction activity and inventory locally in Ottawa, rather than just a short-term bump.
Source: Toronto Star, via Google News
