The New Democrats have announced details of their new homebuyers rebate program, which will start the day after the election if the party forms the next provincial government.

Here are the basics of the program:

  • Buyers of new homes will qualify for a 50 per cent reduction in the provincial portion of the HST, up to a maximum of $6,500.
  • Buyers can get an additional $500 rebate if the new home has an EnerGuide rating of 83 or higher.
  • Rebates will be available on any new home construction that begins on Oct. 9, 2013, or later.
  • The program will cost $10 million.

This rebate program is almost identical to the new home rebate program the NDP government offered in 2009.

In the press release announcing the party's newest promise, it says: "The previous NDP new home construction rebate program spurred the construction and sale of 1,500 new homes."

If that was the case, you would expect to see a spike in new housing starts during the life of the program. But here's what actually happened, according to statistics from the Canada Mortgage and Housing Corporation:

  • In 2008 — the year before the rebates were offered — there were 3,183 new, single-family homes built in Nova Scotia.
  • In 2009 — once the rebate program began — the number of housing starts actually dropped by more than 500, to 2,654.
  • In 2010 — the year after the rebates ended — housing starts went up again, reaching 2,965.

The Nova Scotia Home Builders' Association — which obviously likes this program — points out there was a recession in 2009. Even though the number of housing starts declined that year, the association says the numbers could have been worse without the rebates.

But while these rebates certainly give new buyers a break, there are questions about how effective these programs are in spurring new home construction.

In its latest housing market outlook, the Canada Mortgage and Housing Corporation offered this assessment of the problems facing the Halifax housing market: "The recent weakness in sales is largely attributed to flattening population growth, shifting demand towards apartments and minimal full-time job creation."