Kitchens still the reno money room
July 10, 2018
Housing demographics have changed over the years and Canada’s housing market has changed in the past few months, but a national survey shows that one home aspect remains constant: a kitchen remains the renovation money room.
According to a recent cross-Canada survey of over 750 Royal LePage real estate agents, a kitchen renovation has the potential to boost a home’s value by more than 12.5 per cent.
Bathrooms rank second in payback, tied with finishing a basement—either of which can return from 2.5 to 12.5 per cent of renovation costs depending on the extent and quality of the work, the survey found.
“[Homeowners] need to keep potential buyers in mind,” said Tom Storey, real estate agent, Royal LePage Signature Realty of North York, Ontario. “While updating a kitchen should increase the sale price, a pool can actually deter families with young children or those who are looking for less maintenance.”
In fact, agents said adding a pool or deck is considered the least worthwhile renovation to increase a property’s value with potential payback limited to a maximum of 2.5 per cent of the value of the home.
The survey showed that prospective sellers are willing to invest less than 2.5 per cent of a property’s value on home renovations prior to listing their home, which represents an investment of up to $15,138 on a property valued at $605,5122—the current median home price in Canada.
When asked which generation is the most likely to renovate their home, 45.1 per cent of surveyed agents said baby boomers. Many in this demographic are planning to sell and downsize, and are most likely to have the funds needed for a significant renovation.
“Baby boomers run the risk of their property selling for a lower price or languishing on the market for longer than expected if they held their property for a long period of time without updating periodically,” said Storey. “Its very hard for a buyer to get excited or imagine living in a space that is run down or the decor reflects another generation.”