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Is Confusion Over HST Affecting Home Sales?

CBC News Study Blames Confusion Over HST On A “Slide In Home Sales”

There was an interesting article on cbc.ca yesterday that stated:

“Residents of Ontario and B.C. are unsure about how the harmonized sales tax (HST) affects real estate transactions, a new study finds, and the confusion is being blamed for a slide in home sales.”

According to the Toronto Real Estate Board home sales in Toronto fell by 34% in July and that home sales were at the lowest level since 2002.

Now the Toronto market affects Wasaga Beach where buyers from the city are looking for second homes, retirement homes or just more value for their $.

BUT we are talking about one months figures NOT a trend. Also Toronto is part of Ontario but does not reflect the whole province although it is often portrayed that way. Just as the hot market in Toronto of the last few months has not been seen here in Wasaga Beach nor will this 34% fall in sales.

TREB president Bill Johnston revealingly says:

“The level of July sales remained below the expected long-term trend. The market has become more balanced following record monthly sales through most of the winter and early spring.”

So the market is balanced not in free fall as the initial comments suggest.

So why is the new HST being made the fall guy? A survey by Royal LePage found that 43.9 per cent feel the tax is playing a part in cooling the housing market. This was a survey of their REALTORS® in Ontario and B.C. not of home buyers.

“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.

“According to the brokers, 46.7 per cent of comments from buyers and sellers indicate confusion about how the new tax affects home sales. And 57.1 per cent of Realtors say they get “many” questions about how the tax works.”

Not the most scientific results. Comments “indicate” confusion and half the REALTORS® get “many” questions. I wager that this has more to do with the agents not understanding how the HST affects real estate and not bothering to educate themselves about it.

If you want some answers about HST and buying or selling a home check out this article and also this one.

This entry was posted on Friday, August 6th, 2010 at 2:23 pm and is filed under The World Of Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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