July 01, 2022
Real Estate News
If you’re in the market for a home renovation, you may want to get the ball rolling on it now.
According to the fourth annual Reno Report for 2022 from HomeStars, despite a decrease in planned home renovations, renovation spend will nearly double in the next 12 months for Canadians.
To gauge Canadian homeowner behaviours and sentiments
towards renovations, HomeStars surveyed Canadian homeowners who had completed
renovations in the past year.
Like the cost of gas and groceries, the price of home renovations has been climbing. According to the report, the average spend on home renovations has increased from $8,000 to $13,000 from the previous year. Nearly 20% of Canadians are financing their home renovations. The largest renovation investments were made inside homes; on average, homeowners who completed renovations in the past 12 months spent about $13,000 (up from $8,260 last year). Outdoor renovations followed at about half the spend, with an average of $6,600 to enhance outdoor living (an increase of nearly $2,000 from last year).
Even for those with more cash or savings on hand to finance renovations, the rising cost of building materials encouraged 41% of polled homeowners to postpone planned renovations. With that said, however, when asked about their renovation plans for the next 12 months, 75% of surveyed homeowners indicated they plan to go ahead with renovations.
Since the survey was conducted back in March, there have
been some changes in the economy that could theoretically deter more people
from opting to renovate. Inflation continues to climb, interest rates have
increased, and the housing market has softened in some parts of the country. As
a result, HomeStars contacted 985 Canadian HomeStars clients in June to get a
pulse check on whether or not the current market showed a different result from
their original survey.
Tellingly — despite the volatile climate — 53.6% of Canadians surveyed still planned to move forward with home renovations.
Nationally, homeowners who plan to upgrade their spaces in
the coming year said they’ll be spending an average of $25,222 — nearly double
what they spent on average over the past 12 months. Along with increased
spending, most homeowners intend to stay put and reinvest in their homes rather
than sell and buy, although the proportion who are considering a move actually
increased from 2021 to 2022. According to HomeStars, three in four (76%) of
those surveyed reported that they are not considering moving in the next 12 months,
a drop compared to 2021, where 91% of those surveyed had no plans to move homes
throughout the year.
With the easing of the pandemic and its seemingly endless lockdown measures, coupled with fluctuations in the housing market, Canadians are opting to stay where they are and reinvest in their homes. In the initial HomeStars survey, 56% of surveyed homeowners were planning to stay in their current homes and renovate over the next 12 months. In their June pulse check, HomeStars found that 84% of homeowners surveyed are planning to stay put.
While pandemic-related restrictions may have loosened across the country, the pandemic continued to influence homeowner behaviour, with 40% of respondents saying the presence of COVID-19 restrictions influenced their decision to renovate, an eight percentage point increase from those surveyed the previous year, says HomeStars.
Despite the economic pressures of the past year, Canadians
clearly have more time and money on their hands, as evidenced by the continued
investment in their homes. “It’s evident that Canadians are seeing a
return on investment with their home renovations, indicating they plan to spend
even more time and money renovating more extensively over the next 12 months,”
reads the report. “Though we thought current market conditions would ultimately
deter Canadians from completing expensive home renovations, we saw a consistent
average of more than $25,000 in planned spending for home renovations in the
next 12 months.”
This doesn’t mean that Canadians aren’t trying to cut costs: slightly over half surveyed said they attempt to complete some renovations themselves to reduce overall project costs. Interior painting continued to be the most common renovation project undertaken by homeowners surveyed, with 43% who completed a home renovation doing so. Exterior landscape design remained at the top of the list again for outdoor projects completed over the past 12 months, with 29% reporting doing so.
“The expected average spend for the next 12 months is nearly twice the amount of 2021, suggesting that many Canadians expect to scale up home renovations in the months ahead,” reads the report. “Our June survey of HomeStars customers demonstrated the same trend of doubling spend from the amounts reported in 2021.”
Aside from the anticipated price increases, the main takeaway from the report is that — with the rising cost of renovations — it’s more important now than ever for Canadians to complete a home inspection before and after home improvements. This way, homeowners are aware of the condition of their home and can align their budget accordingly. Completing a home inspection will save both time and money, while also ensuring your home is up to date with the highest safety standards.
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