Home renovations continue to be in demand
RENOVATION spending in Canada has increased every year for the past 15 years and shows no sign of slowing down anytime soon with annual increases exceeding three per cent anticipated for the next two years. Last year, Canadians spent $63.4 billion on renovations, more than double the number in 1998.
What has caused this increase? Some have attributed it to the HGTV factor. Until we watched all of these renovation and design shows, we had no idea how badly we wanted new kitchens and bathrooms. Of course, in Manitoba, we can say the same thing about our Spring and Fall Parades of Homes and our two consumer trade shows. (Kitchen Bath and Renovation Show, Home Expressions Show). In addition, low interest and mortgage rates and rising home values made various home improvements enticing.
More than 40 per cent of Canadians use a secured line of credit to finance thiswork. Just under 20 per cent refinance a mortgage and 15 per cent use an unsecured line of credit.
The biggest increase in type of renovation project over the past year was in energy efficiency improvements, closely followed by bathrooms and kitchens. The biggest decreases were in conversions from non-residential to residential, creating a home-based business office and bedrooms. Basements/rec rooms, additional suites and accessibility were essentially unchanged.
Alberta is expected to grow by five per cent per year in renovation spending for the next two years. Ontario and Quebec account for the majority of spending in Canada; however, Quebec’s current economy may curtail some spending. Surprisingly enough, British Columbia andManitoba, although strong in spending, did not increase at the same rate as the rest of the country last year. In B.C., the reversion to the PST/GST system from the HST created some confusion and so all spending was down. InManitoba, the one per cent increase in PST on July 1 likely slowed spending in the second half of the year.
As Canada’s housing stock continues to increase and age, renovationswill always be in demand.
Mike Moore is the president of the Manitoba Home Builders’ Association.