London Free Press (Myke Thomas) /August 11, 2018 –When it comes to renovating their homes, Canadians are a busy bunch.
In it latest Housing Report, Altus Group says Canadians spent $77.7 billion on home renovations in 2017, including upgrades that are considered capital expenditures (such as alterations, improvements and conversions) and repairs, considered current expenditures.
“In 2017, the value of upgrades to Canadian homes totalled $59.1 billion, virtually matching spending on new home construction,” says Altus. “When the $18.6 billion in repairs are added in on the renovation side, total renovation spending in 2017 accounted for 57 percent of all residential construction spending.”
The only two provinces where spending on new homes was higher than spending on renovations were B.C. and Alberta.
According to the 2016 Canadian census, about 920,500 housing units, or about 6.5 percent of occupied housing stock in the country, were identified as being in need of major work on aspects such as defective plumbing or electrical wiring, structural repairs to walls, floors or ceilings, etc.
“Not surprisingly, the incidence of need for major work increases with age of the dwelling unit,” says Altus. “More than half of the units in need of major work were built between 1946 and 1980, when home construction was elevated following World War II and as the first half of the baby boomers entered the housing market.”
Altus Group estimates suggest at least $17 billion of new borrowing was done by Canadian homeowners for the purposes of renovations in 2017.
“Secured financing – using products such as home equity lines of credit (HELOCs) or refinancing a mortgage to a larger amount – accounted for about half of the dollar borrowed,” says Altus. “Given the need for home equity to borrow against, about two-thirds of the total borrowing with HELOCs for renovations was done by homeowners aged 50 or older, with those aged 65 or older accounting for about one-quarter of the overall total.”
- Residential renovation spending in Canada reached almost $78 billion last year – growing at a stronger pace than the overall economy
- More dollars spent on renovating homes than building new ones
- Three out of every four renovation dollars spent on upgrades
- Lots of work needed on homes built after WWII and before 1981
- Seniors account for one-quarter of HELOC renovation-related new borrowing
- More homeowners planning renovations than a year ago
- Renovation spending expected to stay robust – but grow at a slower rate than last year