Renovation industry likely to remain strong
RESIDENTIAL renovation is a $54-billion business annually in Canada.
Manitoba and Winnipeg have long been reputed to be the renovation capitals of Canada. Even though we don’t always follow national trends, we can always learn from them.
Even in the recessionary times of late 2008 and early 2009, renovation spending remained positive in Canada. Last year, home improvements and repairs increased .8 per cent across the country in a time where discretionary spending was being severely reduced. Much of the credit goes to the Home Renovation Tax Credit and the ecoEnergy retrofit grants from the federal government.
Now that both programs have ended, it will be interesting to see the impact on renovations this year. Although the HRTC did its intended job of stimulating the economy, it should have been extended in some form.
Winnipeg has the third-oldest hous- ing stock in Canada and those houses will require renovations. Our boom in existing home sales also bodes well for the industry. Many households make repairs, as well as cosmetic changes prior to selling, in order to increase the attractiveness of the house.
There are, however, a few dark clouds on the horizon for the renovation industry. First and foremost is the impact of the Harmonized Sales Tax.
Ontario and B.C. are implementing the HST on July 1 of this year; Quebec and Nova Scotia are increasing their existing tax rates. Manitoba is currently HST free, so our homeowners seeking renovations will not be subject to that additional tax burden.
The projected increase in interest rates may have some effect on the industry, but it is not likely to be a large factor in Manitoba. Rates are still very low and consumers still see the wisdom in taking advantage of the opportunity to borrow in order to make home improvements.
Renovation spending is projected to be up 6.6 per cent across Canada this year, with comparable increases in Manitoba. That number will drop by 3.2 per cent in Canada while remaining about the same here in 2011.
By all accounts, the renovation industry is expected to remain very strong in Manitoba for the foreseeable future.