MMM: The $130K “Savings”

Written By Mayu Thava

Everyone’s celebrating the “up to $130K” HST rebate on preconstruction — but very few people are thinking about what it actually does to pricing.

Here’s the reality.

What I’m Already Seeing

I’ve been speaking with a few realtors who specialize in preconstruction… and developers are already trying to figure out how much more they can charge.

On paper, buyers “save” up to $130K.

In reality?

This resets how pricing works across the entire market.

The Math No One Is Talking About

Let’s simplify this.

Before the rebate:

  • Preconstruction: $1,000,000

  • Resale: ~$980,000

Buyers were okay paying a small premium for:

  • A new build

  • Delayed closing

  • Potential appreciation

Now?

That same $1M preconstruction property feels closer to ~$870K after the rebate.

So ask yourself:

Why would anyone pay $980K for resale anymore?

They wouldn’t.

What Happens Next

One of two things plays out.

1. Developers Raise Prices

Developers close the gap and capture the rebate.

Projects that didn’t make sense before suddenly become viable — which could mean:

  • More supply

  • More activity

  • More launches

But there’s a catch.

You’re now locking in today’s price based on future assumptions, in a market where resale demand may weaken.

Appraisal risk becomes real.

2. Resale Prices Adjust Downward

Demand shifts toward preconstruction → resale weakens → comparable sales drop.

This becomes a government stimulus that indirectly puts pressure on existing homeowners… while supporting developers and construction.

The Loop Most People Miss

Here’s how it can play out:

  • Government subsidizes preconstruction

  • Developers raise prices

  • Buyers shift demand

  • Resale weakens

  • Comparable sales drop

  • Preconstruction exit risk increases

It’s a full-circle moment.

There Is an Alternate Outcome

In a perfect world, this rebate creates new demand — not shifted demand.

  • Preconstruction prices rise

  • Resale holds steady

  • Everyone wins

Personally, I don’t think that’s the most likely scenario.

My Take

This policy will absolutely help some buyers and stimulate new construction.

But it will also:

  • Distort pricing

  • Shift demand away from resale

  • Reintroduce real risk into preconstruction investing

I’m not going to tell you what to do.

Just understand the game you’re playing.

Because in markets like this…

  • Getting it right can make you money

  • Getting it wrong can cost you six figures

Mayu Thava
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MMM: We Walked Away From a “Good Deal” - Here’s Why