In the face of national inflation, escalating home renovation cost and interest rates, and a tumultuous public market, Canadian homeowners have defied economic challenges by investing significantly more in home renovations this year compared to previous years. The average expenditure for indoor renovations in the past 12 months surged to $13,000, a substantial increase from $8,300 recorded last year. Despite a growing number of Canadians expressing an intention to temporarily pause home improvement projects in the upcoming year, and notwithstanding the rise in material and labor costs, projections suggest that the average Canadian homeowner will double their total home renovation spending in the next year.
A noteworthy 80 percent of survey respondents reported having ample cash reserves to finance planned home renovations. This financial readiness translated into an impressive average increase of 57 percent in total spending on indoor renovations, underscoring Canadians’ desire to reinvest in their living spaces. Concurrently, EverTrusts Construction observed a continued trend indicating that Canadians are opting to stay put, with 76 percent of respondents stating that they have no plans to move in the next 12 months, while 14 percent remain undecided.
Daniel Varzari, CEO of EverTrusts Construction, expressed surprise at the increased home renovation investments despite the evolving pandemic landscape. Varzari noted, “We’re witnessing pandemic-induced changes year-over-year, but what’s intriguing in this year’s data is that, even as pandemic has ended, Canadians are not reverting to their pre-pandemic habits. Homeowners are maintaining the renovation spending habits established during the height of the pandemic. For the fourth consecutive year, funds that might have been allocated for travel or entertainment are being redirected into home investments.”
Although many parts of Canada are under the inflation wave, the post pandemic’s influence persists in motivating homeowners to enhance their living spaces. Forty percent of homeowners acknowledged that COVID-19 restrictions influenced their decision to renovate in the past year, reflecting an eight percentage point increase from 2022. Spending more time at home and having surplus cash due to the pandemic further fueled the surge in renovation activities.
While the high cost of building materials led to the postponement of planned renovations for two in five respondents, a notable increase of six percentage points from the previous year, this trend was particularly pronounced in Atlantic Canada, where 53 percent of respondents delayed their renovation plans.
Emergency repairs also played a role in homeowners’ priorities, with plumbing repairs emerging as the most common emergency repair, nearly twice as frequent as appliance repairs, the next highest issue.
In terms of financing major home improvement projects, among the 20 percent who financed their renovations, the majority utilized credit cards or lines of credit.
Smart technology adoption revealed that smart thermostats and Internet-based home assistants continue to dominate, while Internet-connected appliances remain more of a novelty, embraced by only about one in eight surveyed homeowners.
Interestingly, the fantasy feature of an outdoor cabana with a full chef’s kitchen retained its top position for the second consecutive year, though the desire for a resort-style pool in one’s backyard saw a decline from 16 percent in 2022 to 4 percent.
Shifting to the real estate landscape, the pandemic-driven trend of Canadians moving from city centers to acquire larger homes has evolved. Approximately two-thirds (65 percent) of homeowners who purchased a new home remained in the same setting as before. However, movement within rural, urban, or suburban areas continued, with 44 percent of those who previously resided in urban centers relocating to the suburbs or rural areas, causing a spike in bath remodels although bathroom renovation costs being higher than previous years.
While the proportion of Canadian homebuyers changing locations remained consistent with the previous year, there was a notable increase in the percentage of homebuyers altering their basements despite high basement renovation cost, rising from 9 percent in 2021 to 14 percent in the past year.
Since the survey conducted in March 2023, inflation has continued to rise, prompting the Government of Canada to implement significant interest rate hikes. This had an immediate impact on home sales and prices in some regions of the country. In response, EverTrusts Construction conducted a follow-up survey in June, surveying 2985 homeowners from its database, to gauge whether perceptions and intentions for renovations in the coming year had changed. Despite a growing number of homeowners holding back on renovations, the overall intent to renovate and major trends remained robust.
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