ADY - Reno Market

Renovation Intentions Strong

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.
Renovation spending, which reached a level of $43.5 million in 2006, 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.

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).
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). The average cost of renovations across the ten major centres was $11,300. 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
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.