There’s been no shortage of analysts who have suggested that the housing market will slump in the second half of this year due to the implementation of the HST effective July 1, 2010. I tend to disagree and I’ll tell you why.

I’m not sure whether these analysts are thinking that demand is being pulled forward by buyers trying to beat the HST or that demand will simply evaporate after July 1 due to higher house prices.

If higher prices are the concern, it’s very important to note that up to $400,000, the HST is fully offset by rebates and input tax credits. Above that price threshold, the $24,000 rebate substantially cushions the impact of the HST through the middle price ranges.

Where the HST does start to bite is in the higher price ranges, but that’s obviously a less price-sensitive buyer and a much smaller market segment.

As for beating the HST, the reality is that homebuyers have not been able to beat the HST since June 18, 2009, which is the day the Ontario government announced that any homes purchased after that date would be subject to HST unless delivered no later than June 30, 2010. Note that homes or condos purchased before that date are exempt regardless of when they close.

Believe it or not, the HST has been in effect for nearly nine months on new homes, yet buyers have apparently been more influenced by great prices and great interest rates, making their decisions on a bottom-line basis and not getting all hung-up about the HST. I don’t see this changing after July 1, 2010, which is why I don’t buy the second-half slow-down theory.

That said, I would reiterate to potential new homebuyers that they may see “beat the HST” advertisements by builders for inventory units that they have in completed condominium buildings or even low-rise projects where the builder chose to build-out unsold units while the workers were onsite rather than bring them back on a piecemeal basis later on. As long as the unit can close by June 30, 2010, you’ve got yourself a deal.

– Stephen Dupuis is president and CEO of the Building Industry and Land Development Association (BILD). He can be reached at