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© Copyright 2007 Work-4 Projects Ltd.
Renovation Intentions Strong

By Ann-Margret Hovsepian

Renovation spending, which has progressed at a strong pace since 1999, will continue its upward trend at least until 2008, according to Canada Mortgage and Housing Corporation's Housing Market Outlook for the third quarter of 2007. "The renovation market will continue to benefit from the strong Canadian economic growth of recent years and the solid performance of the housing market," the report states. "In particular, a record share of Canadians are employed, which has helped boost income gains, which in turn have given consumers the confidence to go ahead with the major expenditures that the renovations entail. Low mortgage rates, record sales of existing homes, and high levels of housing starts over the last five years have also contributed to the pick-up in renovation activity."
BONNIE HARDY, business manager of Covenant Construction in London, Ontario, and vice chair of the London Home Builders' Association Renovators' Council, adds that homeowners are excited by the vast selection of products available to them and want to try them out. "People are busy but when they come home they want a nice place to live in," she explains. "I love doing renovations because I get to put in really high-quality products such as $800 faucets. Sometimes, in new home construction, the products aren't so unique."
Renovation spending, which reached a level of $43.5 million in 2006 - more than the amount spent on new home construction - is expected to remain strong, increasing 9.8 per cent this year to $49.9 billion, and 6.8 per cent in 2008 to $53.3 billion. The Spring/Summer 2007 CHBA Pulse Survey reports that almost half of CHBA renovator members indicated their renovation activity was higher in the past 12 months, compare to just one in eight who reported a decline. In all regions, more renovators expect further increases rather than lower activity.

Where the Dollars Went
Across ten major Canadian markets, an average 39 per cent of homeowners, or about 1.5 million households, completed some form of renovation in 2006, according to the latest CMHC Renovation and Home Purchase Report. St. John's, Halifax, Winnipeg and Montreal had the highest share of renovators (42 per cent) while Vancouver had the lowest (35 per cent). The other markets surveyed were Quebec, Toronto, Ottawa, Calgary and Edmonton.
Nearly three-quarters of the homeowners who undertook renovations made alterations or improvements to their homes, while 43 per cent did maintenance or repairs, and 16 per cent did both. The most popular renovations involved remodelling a room (34 per cent), followed by installing hard surface flooring or wall-to-wall carpeting, and painting or wallpapering (32 per cent each). Other renovation work included windows and doors (20 per cent), major landscaping projects (18 per cent), interior walls and ceilings (15 per cent), plumbing fixtures and equipment (14 per cent), roofs and eavestroughing (14 per cent), and electrical fixtures and equipment (10 per cent).
Reasons given by homeowners for renovating in 2006 were: wanting to update, add value, or prepare their homes for sale (61 per cent); necessary repairs (30 per cent); necessary maintenance (19 per cent); to add more space (7 per cent); and to make the home more energy efficient (7 per cent).
Although one-third of households undertook renovation work themselves, 40 per cent hired contractors to do all the work and nearly one-quarter contracted out a portion of the work. Hardy says that homeowners are increasingly turning over their entire renovation project to the contractor rather than picking out aspects of it to do themselves. "We no longer hear, 'My brother's an electrician so he'll take care of that.' People are busy these days so they're looking for contractors to take on the whole job."
The average cost of renovations across the ten major centres was $11,300. The highest spending was in Vancouver ($14,400) and the lowest was in St. John's (just over $8,100). Total spending across the ten major centres exceeded $17.3 billion - over half of that amount just in Toronto (over $5.8 billion) and Montreal (over $3.4 billion).

Market Growth Expected to Continue
Intentions to undertake renovations valued at $1,000 or more in 2007 have grown to 46 per cent for 2007. CMHC conducted a more detailed survey in Halifax, Montreal, Toronto, Calgary and Vancouver and found that, in these five major market centres, 51 per cent of those intending to renovate are between the ages of 35 and 44, while only 31 per cent of those 65 or older plan to renovate this year.
Owners of older homes have the highest intentions of renovating and, the older the dwelling, the more likely it is the renovation work will involve maintenance or repairs. In contrast, those with the newest homes have the highest intentions of undertaking alterations or improvements. Overall, 76 per cent of renovation intenders will do alterations or improvements and 41 per cent will do maintenance or repairs.
Among the five major centres surveyed, the average estimate for renovation spending in 2007 was $11,270, ranging from $14,150 in Vancouver to $7,400 in Halifax. "The feeling is positive," says Hardy, "even though we hear about the softening of the new home market. Fifty years ago, people wouldn't renovate their homes for 40 years. Now, just six years after building a new house, they're renovating."
HB


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