Prices are dropping for these niche Toronto homes in family-friendly neighbourhoods. Will it last?

On Gerrard Street, a three-storey condo multiplex has seen prices drop, and the selling agent says it’s garnering more interest from buyers. 

The 1,400-square-foot penthouse with rooftop terrace recently sold for $825,000, according to HouseSigma, a real estate data platform. Another, 1,100-square-foot unit with two bedrooms, two bathrooms and two balconies is listed for $700,000.

“The suites are roughly $100,000 less than they were four or five months ago as a result, purely, of this pending HST relief,” said Paul Johnston, the realtor for the multiplex. “We are certainly seeing activity that didn’t previously exist.”

The HST rebate generally allows buyers to save on taxes for newly constructed homes purchased between April 1, 2026 and March 31, 2027. Buyers could save a maximum of $130,000 for homes costing up to $1.5 million, with smaller savings for homes costing up to $1.85 million.

While sales activity in the new-build sector increased in May after the rebate was announced, Toronto saw little growth. Lowrise home sales in the GTA nearly quadrupled compared to the historic low one year prior, but only five of the 830 sales were in Toronto itself. Condo sales, meanwhile, remained 89 per cent below the 10-year average. About half of 193 units sold were in Toronto.

Experts say condo multiplexes are an important niche in the market, particularly for young families. But while the HST rebate may be prompting new interest, they say its limitations mean multiplex developers will struggle to build new projects in time for buyers to benefit from the tax savings.

Multiplexes and the HST rebate factor 

While multiplexes are traditionally owned by one person or company who rents out the units, condo multiplexes allow buyers to own their own unit, like they would in a condo apartment building.

These developments have been popping up around Toronto in recent years as the city pushes to allow more “missing middle” housing — homes somewhere between a detached house and a highrise apartment — in lowrise neighbourhoods. 

“This is taking what otherwise would have been a single-family lot that might have had three people living in it, and it’s created four generous, spacious, bright, extremely livable homes,” said Johnston about the Gerrard street building. 

Karen Chapple, director of the University of Toronto’s School of Cities, said these homes help respond to the “great demand” for lowrise homes in the city, instead of pushing buyers to suburbs, at a time when Toronto doesn’t have many starter homes.

“Typically, (condo multiplexes) are built in denser areas near transit, so you’re not having to resign yourself to a single-family, auto-oriented fabric,” Chapple said. “It opens up different options for young families.”

Mike Moffatt, director of the University of Ottawa’s Missing Middle Initiative, added they’re also a more affordable option to stay in the city.

“It fits this important niche where it can be a little bit friendlier to families than a highrise apartment, but a little bit more attainable than even a small, single detached home,” he said.

The HST rebate brings that price down further.

In another condo multiplex in the Junction, all three units have sold since the HST rebate expansion was announced, while a laneway condo in the same development is listed at a significant discount.

The homes sold include a four-bedroom, three-bathroom unit for $1.01 million, and a three-bedroom unit with two bathrooms for $690,000. A three-bedroom unit with two bathrooms listed for $600,000 has sold conditionally, according to HouseSigma. 

The unsold laneway condo, which has four bedrooms and three bathrooms, is listed for $1 million, down $150,000 since April. 

Developer HMV Homes owner Harry Varvarian said they had been trying to sell units in January and February, but buyers only made their purchases after the rebate was announced. Despite the spring market typically being busier than the winter market, he believes the rebate played a big part in attracting buyers.

“Since then, we have much more activity,” he said.

Timeline hampers new multiplexes

Varvarian and Johnston said they believe buyers’ initial confusion over how the rebate worked may have deterred some purchasers. While the rebate was announced in March with the qualifying period beginning April 1, the legislation only went into effect this week.

Johnston said he expects to see more interest now for finished units, but said the requirements of the rebate mean it likely won’t spur more multiplexes to be built. 

That’s because for the rebate to apply, the purchase agreement would have to be made between April 1, 2026 and March 31, 2027.

“It’s pretty difficult for a builder or developer to sort of turn on the taps to certainly build and be completed in that timeline,” Johnston said. “That would be almost unrealistic; these projects would generally take 10, 12, 14, 16, months to build.”

Additionally, unlike most new highrise condos and new-build single-family houses, this housing type typically sells after, not before, construction is done.

“Not everyone has a stomach” for buying pre-built homes, Johnston said.