Frontline Outlook for 2018
Busy top renovators take time from job sites to give Home BUILDER their take on challenges, changes and the outlook for 2018
By Frank O’Brien
Heidi Smith, president of Spaces NL in St. John’s, Newfoundland and Labrador,
said an aging demographic and the underground economy are issues Atlantic renovators will be facing in 2018. Smith said most local renovations concentrate on improving kitchens and bathrooms—solid-surface countertops are popular—and walk-in closets, which give homeowners potentially the best returns at resale.
An untapped market, Smith said, is “flex and accessible” renovations to meet the needs of NL’s large and growing aging population.
Looking forward, Smith said the biggest challenge is NL’s underground economy, which she estimates accounts for about 30 per cent of spending taken away from “the honest business that has overhead and is paying taxes.”
Another concern is that new federal mortgage regulations will affect the amount of home equity loans, which are often spent on renovations.
St. John’s is dependent on the resource industry, Smith noted, and is coming off a “hard year.” But she is confident. “It is my opinion that 2018 will be slightly better and therefore hiring may be a possibility but not a certainty. My hope is that by third quarter [we will see] a turn in the economy and spending will create a noticeable, positive difference in our industry.”
Peder Madsen, co-owner of CCR Building & Remodelling Inc. of London, Ontario,
told Home BUILDER that the size of local renovation contracts has increased, but he worries about a looming labour shortage.
“It is not uncommon to see half-a-million dollar renovation now,” said Madsen. His 12-person crew “is just swamped with work” Madsen noted.
“There is definitely a need for more city staff and construction trades—which is the same story across Ontario, if not Canada, entirely. The message needs to hit the school system so we can bridge the gap in coming years.”
Southern Ontario housing sales were cooling in the fourth quarter, but Madsen does not expect renovation spending to follow suit. “I do anticipate the market heating up again. Definitely a prosperous year [ahead] for London and surrounding area.”
Tyson Hiebert, president of Hammerdown Home Renovations and General Construction Ltd. of Winnipeg, and a 2017 RenoMark award winner, sees the biggest opportunity in whole-house renovations.
The majority of these homeowners are empty-nester baby boomers that are either approaching retirement or early into retirement, he explained. “These clients typically have equity in their home,” Hiebert said, with the means to pay for quality, extensive renovations.
They prefer this to buying a new home that could be more expensive, has higher property taxes and often a smaller yard, he said.
“Our clients are requesting a finished product that is above the standard new home build. All of our kitchens have LED pot lighting and under-cabinet lighting. Custom vinyl tile and vinyl plank are extremely popular in all renovations. The options are endless with these products. They are maintenance free, extremely durable and budget friendly,” he said.
While Hiebert has seen fluctuating demand this year in Winnipeg, he is confident of a strong 2018.
“I defiantly anticipate hiring to continue. My intention is to add two people to our team in 2018: one to assist in sales and another carpenter to increase our production. Our reputation that we have worked so hard for continues to allow growth.”
Robert Capar, president of Maison D’etre Inc., a multiple award-wining Vancouver
renovation company, said two trends may define local home renovations this year: the rise of condominium renovations and the challenge of meeting new energy codes in both the city and across British Columbia.
Condominium renovations will “certainly match or exceed the volume in detached house renovations.” He noted many house owners are selling the most expensive houses in Canada and downsizing into a condo. “They have the money...many see it as their last home, so they are doing everything they have always wanted,” Capar said.
But Vancouver’s new zero-emission bylaw and B.C.’s new Energy Step Code are causing problems, he said. “The new Energy Step Code in B.C. is going to bring about a lot of issues in the renovation market for whole-house renos; making even a mid-level reno become major as the new energy rules will require substantial upgrades to the whole house.”
He added that Vancouver’s zero-emission bylaw that came to effect in May 2017 requires Certified Energy Advisor (CEA) Reports, which is causing delays. “Just finding and booking a CEA is taking up to a month and then you have the two weeks waiting for report to be produced before even applying for the permit. Therefore the upfront costs are increasing and the timelines to get a project to permit are increasing.”
Still, Capar expects to remain busy in 2018. He plans to hire a project coordinator and “if they exist—a qualified renovation carpenter.”
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