Renovation spending tops $72 billion record
Canadian homeowners are forecast to spend a record $72 billion on renovations in 2017, topping the $71.2 billion in 2016, and then ascend to another record of $74 billion in 2018.
Renovation spending is now eclipsing new home construction by a wide margin, reports Altus Group.
Canada’s entire new home market was worth $53 billion in 2016 and Canadians are now spending about $1.33 on renovations for every $1 spent building new homes, the report said.
But the real estate consultancy said next year may represent a peak in renovation spending, at least for a while.
“We are often asked whether we see any evidence that homeowners are increasingly planning to stay put and renovate their home to meet their changing needs, rather than move to a new home,” Altus Group asked in its recent report on the sector. “Intentions to move versus intentions to undertake larger renovations ($10,000 plus) are very similar to last year and to adopt HGTV’s terminology, there has been no increase to love it rather than list it.”
The real signs of a slowing renovation market is the growth in spending per unit. That was about $5,000 over the past five years, not much more than the period from 2007-2011.
“This means that the recent growth in renovation spending has been more driven by growth in the housing stock (the total number of units renovated) than by increased spending per unit, than was the situation in the decade of the 2000s,” Altus Group said.
Add it all up, though, and Canada’s total residential construction industry represents a $10 billion-per-month industry, and one of the largest employers in the country.