Two weeks ago we published a story about the repeal of the HST after a referendum in BC and the possible effects it may have on the BC housing market.
To give you the gist of it, according to Central 1 Credit Union, the removal of the HST and the return of the provincial sales tax mixed with the GST will cause some homebuyers to delay purchases until 2013 — when the HST is fully repealed — leading to a decline in 2011 home sales.
“People looking at new homes priced over $525,000 may very well wait until the tax changes lower the 12 per cent hit they face,” explained Bryan Yu, the credit union’s economist in a news release.
But not everyone is agreeing with the Central 1 Credit Union’s position.
“What we’re experiencing in our townhome projects and condominium projects that we’re currently marketing is the HST removal is virtually having no impact at all,” said Cristy Edmonds, Vice President, Sales and Marketing at the Surrey, BC-based project marketing company, Fifth Avenue Real Estate.
Cristy told us today in a phone interview that since August 26, when the referendum results were announced, there have been 120 sales at projects Fifth Avenue is marketing. Furthermore, one South Surrey project, Edgewater has experienced a major sales increase, boasting 130 sales in 120 days.
“When you actually look at the numbers that the end user is paying, the difference between current HST netable rebate and applying GST with rebates as well is actually only 2 per cent,” Cristy explained.
“Most homebuyers aren’t putting off their decision until 2013 for 2 per cent. Especially with our townhome projects, that are move-in ready or move-in ready in a few months, the buyers aren’t going to wait.”
She agreed that there may be a decline for high priced family homes and condominiums, noting that around the million dollar price point, where there are no rebates, a purchaser would save a significant amount of money by waiting until the HST is removed in 2013.
However, she said that buyers looking at less expensive projects probably won’t hold off.
“Buyers want to get the unit of their choice, and if they wait until 2013 there’s a good chance that what they want won’t be available,” she concluded.
An interesting perspective indeed. Would you hold off to save 2 per cent? Or would you jump in, 2 per cent be damned, just to get your first choice of townhouse or suite?
Want to hear more from Cristy Edmonds? Check out our BuzzTalk with her here!