Aug 6, 2010
The number of B.C. and Ontario resale homes sold last month was significantly lower than July 2009. According to the MLS, July home sales fell in Vancouver by 45%, in Calgary by 42% and in Toronto by 34%.
A CBC News article suggests the drop may be attributable to Ontario and B.C. residents unsure about how the harmonized sales tax (HST) affects real estate transactions.
The article cites an email survey of 675 Ontario and B.C. realtors in which the majority of respondents claim their clients are unsure about how the HST applies to home purchases.
“According to our realtors who work in B.C. and Ontario communities every day, misconceptions about the HST are having an effect on the market in both provinces,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services, in Toronto.
HST affecting the volume of home sales sounds like a good theory to me and it suggests that as soon as home purchasers get the message that HST does NOT apply to resale homes, the market will return to normal.