A poll released by CIBC reveals that Canadian homeowners are renovating their properties to stave off buying new homes.
Almost 50 per cent of Canadians are planning to repair or improve their home this year, up from 37 per cent in 2016. Of those choosing to renovate, over half are doing so to avoid jumping into Canada’s tumultuous housing market.
“One of the interesting things that we found in the CIBC poll is that particularly in the GTA, some of the Canadians who really felt that they wanted to choose to stay in their home wanted to renovate as opposed to jumping into the housing market. More than half of Canadians across the country actually said that,” said Kathleen Woodard, a senior vice-president and Ontario region head for CIBC.
She goes on to explain that those surveyed found investing in a renovation less stressful than trying to buy and sell their home in the current market, likely because of current housing prices. Woodward says that home renovations in Canada could reach their highest point in three years during 2017.
The national average for renovation budgets in Canada is $11,000, she notes. It’s important to note that the average varies by area across the country. The average amount spent on renovations for homeowners in the GTA is approximately $21,000. Regardless, however, Woodard explains that the cost of a renovation may be less daunting to homeowners than the investment currently required to purchase a home in Canada.
An RBC home ownership poll released in April stated that Canada’s average home price had climbed to almost $520,000, up 3.5 per cent from the year before.
“Well, obviously, I think with $11,000 as the national average, it’s certainly going to be a lesser investment than purchasing a new home. It’s just really reflective of how Canadians are conscious of the fact that we have record numbers of household debt, and record-level housing prices,” she says.
Scott McGillivray, real estate investor and renovation television personality, said in a statement that while moving can address a homeowner’s need for space, a renovation can have a similar benefit.
“These findings show that the decision to either renovate or relocate comes down to your financial situation, emotional attachment to your home and ultimate real-estate goals,” says McGillivray. “While moving into a new home can help address your need for space, a renovation can often help achieve the same goal, while keeping you in your neighbourhood and, if done right, adding value to your home.”
The Canadian housing market made headlines over the past few months because of its lofty prices. The April survey also revealed that Canadians are putting off the purchase of a new home in hopes that prices will come down.