Spending drops as much as 25 per cent in some provinces as
more homeowners focus on wear and tear
TORONTO, May 31, 2018 /CNW/ - CIBC poll (CM:TSX)
(CM:NYSE) – While nearly half (45 per cent) of Canadians
plan to renovate their home this year, spending is down 7 per cent
to about $11,000 -- its lowest
in five years—as more homeowners focus on home maintenance and
repairs, finds the annual CIBC Home Renovations Poll.
"Canadians continue to see the value of investing in their
homes, but they're taking a very practical approach by focusing on
lower-cost projects this year," says Edward Penner, Executive
Vice-President, CIBC Personal and Small Business Banking. "No
matter how big or small the project, your first step is to figure
out what's needed, what you can afford and how you're going to pay
for it so you can enjoy your space without the worry of
overspending and unnecessary debt."
Key poll findings:
- 45 per cent of Canadian homeowners intend to
repair or improve their home this year, compared to 48 per
cent in 2017
-
- $11,000 is the average
they plan to spend on their home, down from roughly $11,800 last year
-
- Ontarians plan to spend $13,600, the highest in the country, but down
from $16,000 last year
- Albertans plan to spend $8,100, the lowest in the country, but up
compared to $7,400 last
year
- Spending drops to $9,900
in British Columbia from
$13,200 last year
- Spending edges higher in Quebec and Atlantic
Canada at $9,900 and
$9,500 respectively
- Top renovation projects include basic maintenance (52 per
cent); landscaping (39 per cent); and bathroom
renovations (39 per cent)
- Majority (86 per cent) believe any renovation is an
investment in the value of their home
- 59 per cent will use cash or savings to fund their
projects, while 29 per cent will cover the costs with a
loan, line of credit or credit card
- Two in five (44 per cent) will cover the expense right
away, while a third (34 per cent) expect it to take up to a
year, and another 15 per cent don't expect to pay it
off for a year or longer
Fewer big-ticket renos in Western Canada, yet few plan to stick to a
budget
The survey reveals that many more homeowners in
Western Canada plan to renovate this year than two years ago.
Yet, their spending has dropped sharply as the focus shifts
from full-scale renovations to budget-friendly fixes, such as
painting, flooring and general repairs. In Alberta, although planned expenditures are up
9 per cent from last year, they're down by as much as 65 per cent
from 2016 when homeowners spent on average $23,000. Similarly, in British
Columbia, spending fell 35 percent to $9,900 from $15,522 over the same period.
"Staying on top of maintenance and repairs may not be as
exciting as remodeling your kitchen, but these smaller projects can
go a long way to brighten up your home and save you money down the
road," says Mr. Penner.
The survey also revealed that while the vast majority (87 per
cent) of poll respondents agree renovations can easily lead to
overspending, almost two-thirds (63 per cent) of homeowners
don't have a budget for their upcoming project.
"Whatever the size of your project, don't plan down to
your last dollar. Be sure to allow for overages or unexpected
expenses," says Mr. Penner. "If you choose to use a credit card to
make purchases for your renovation to earn rewards, be sure to have
a plan in place to pay off the balance, so your project doesn't end
up costing you more than you plan for," he adds.
Aging boomers prefer to renovate than sell
The poll findings also show that most (71 per cent)
Canadian homeowners aged 55+ would prefer to stay put and renovate
their current home than sell it and move elsewhere. Boomers plan to
spend about $10,800 on
average, down 36 per cent from $16,800 last year, to address wear and tear
primarily.
Moreover, while as many as 71 per cent of Canadians
believe a renovation or home project is a great way to keep busy in
retirement, almost half (45 per cent) of boomers would
prefer to hire a contractor than do the work themselves.
"The decision to downsize or stay in your family home as you age
comes down to how you plan to spend your retirement years," says
Mr. Penner. "While downsizing may reduce your upkeep and free up
funds to finance other goals like travelling, renovating your space
to fit your changing needs as you age can keep you in a home and
neigbourhood you love."
While federal and provincial tax incentives can help offset
the cost of renovations that improve accessibility for seniors, the
poll found that a third (35 per cent) of respondents aren't
clear on what tax deductions or credits are available to
them.
"If you choose to stay put and renovate your space, be sure to
speak to your financial advisor who can help you understand what
how to best finance your project within the context of your overall
financial plan," adds Mr. Penner.
CIBC's Home Renovation Checklist can help homeowners with
valuable tips and advice to keep their project on track.
Renovation Tips
- Be clear about what will (and won't) be part of your
renovation
- Spend the time to research all your costs upfront and shop
around for better prices
- Set a budget and stick to it
- Speak to a financial advisor about how to best finance your
renovation and consider any tax incentives available
- If borrowing, opt for a low-cost borrowing option like a
secured line of credit, and make a plan to pay it off quickly by
automating your payments
KEY POLL FINDINGS:
Percentage of all Canadians homeowners who plan to renovate in
the next 12 months:
|
2018
|
2017
|
2016
|
National
|
45 %
|
48 %
|
37 %
|
BC
|
39 %
|
39 %
|
32 %
|
AB
|
45 %
|
48 %
|
33 %
|
MB/SK
|
43 %
|
48 %
|
37 %
|
ON
|
46 %
|
49 %
|
41 %
|
QC
|
46 %
|
48 %
|
39 %
|
ATL
|
53 %
|
53 %
|
32 %
|
Average spend for Canadian homeowners who plan to renovate:
|
2018
|
2017
|
2016
|
Average
amount
|
$10,959
|
$11,795
|
$13,017
|
$1 to
$4,999
|
29 %
|
29 %
|
27 %
|
$5,000 to
$9,999
|
17 %
|
24 %
|
20 %
|
$10,000 to
$14,999
|
13 %
|
12 %
|
15 %
|
$15,000 to
$24,999
|
10 %
|
9 %
|
9 %
|
$25,000 or
more
|
8 %
|
9 %
|
10 %
|
I don't
know
|
22 %
|
16 %
|
19 %
|
Average spend for Canadian homeowners who plan to renovate, by
province/region:
|
2018
|
2017
|
2016
|
National
|
$10,959
|
$11,795
|
$13,017
|
BC
|
$9,879
|
$13,188
|
$15,522
|
AB
|
$8,073
|
$7,351
|
$22,952
|
MB/SK
|
$10,232
|
$8,288
|
$7,709
|
ON
|
$13,603
|
$15,988
|
$13,878
|
QC
|
$9,909
|
$8,445
|
$7,933
|
Atlantic
|
$9,482
|
$9,212
|
$10,837
|
How Canadian homeowners who plan to renovate will fund their
renovation projects:
|
2018
|
2017
|
2016
|
Cash and
savings
|
59 %
|
67 %
|
56 %
|
Home equity line of
credit
|
11 %
|
7 %
|
11 %
|
Line of credit or
loan
|
9 %
|
10 %
|
12 %
|
Credit
card
|
9 %
|
8 %
|
15 %
|
Insurance claim/pay
out
|
1 %
|
1 %
|
-
|
Other or I don't
know
|
11 %
|
6 %
|
5 %
|
Top five planned home renovations for Canadian homeowners who
plan to renovate:
|
2018
|
2017
|
2016
|
Basic maintenance
(including painting, flooring, general repairs, replacing
appliances)
|
52 %
|
48 %
|
54 %
|
Landscaping
(including outdoor deck, patio, driveway)
|
39 %
|
38 %
|
42 %
|
Bathroom
renovations
|
39 %
|
31 %
|
33 %
|
Replacing windows or
doors
|
29 %
|
23 %
|
23 %
|
Kitchen
renovations
|
28 %
|
26 %
|
26 %
|
CIBC Home Renovation Poll Disclaimer: On
May 2nd and May 9th 2018 an online survey
was conducted in two parts among a total of 3,017 randomly selected
Canadian adults who are Maru Voice
Canada panellists. The surveys were executed by
Maru/Blue. For comparison purposes, a probability sample
of this size has an estimated margin of error (which measures
sampling variability) of +/- 2.5%, 19 times out of 20. The
results have been weighted by education, age, gender and region
(and in Quebec, language) to match
the population, according to Census data. This is to ensure the
sample is representative of the entire adult population of Canada.
Discrepancies in or between totals are due to rounding.
About CIBC
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with 11 million personal banking, business, public sector and
institutional clients. Across Personal and Small Business Banking,
Commercial Banking and Wealth Management, and Capital Markets
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SOURCE CIBC - Consumer Research and Advice