Since the pandemic started in 2019, an increasing number of Canadians have invested in home renovations, updating their bathrooms, kitchens, and yards. A combination of factors is driving this trend – restrictions on travel and dining out, more people working from home, and record low interest rates. With lockdowns, reunions postponed, and vacations cancelled, many Canadians took the opportunity to improve their home and make their life better. Fewer social outings, working remotely, and less time spent telecommuting resulted in more people having the money and time to invest in home renovations.
Data from BMO’s latest Real Financial Progress Survey shows that 62 percent of Canadians are planning on investing in home renovations in 2021. Households in cities such as Toronto (63 percent), Vancouver (58 percent), and Montreal (59 percent) are most likely to renovate their homes. Some 47 percent of Canadians say they will be using cash to invest in renovations, either paying by a line of credit (16 percent) or their credit card (24 percent). With rising inflation, consumer prices, and real estate prices, fewer Canadians are looking to buy a new home. Just 22 percent of respondents plan on moving compared to 25 percent in January 2021.
When it comes to cash surplus, over 30 percent of survey participants said they are putting money aside for future use. Of those, 34 percent are putting cash toward a savings account or an emergency fund while 36 percent plan to give their savings a boost before they retire. About 15 percent of respondents are planning on buying a car, 25 percent are looking to invest in stocks, 29 percent would be using cash surplus for home improvements, and 31 percent would be going on vacation.
Why Invest in Home Renovations?
The RE/MAX’s 2021 Renovation Investment Report shows that more than 50 percent of Canadians who renovated their home did so with the intention of living in it and not selling it. Close to 1/3 or 29 percent of homeowners went on renovating for recreational or aesthetic purposes and the same number report maintenance and safety as the main reasons. Just 16 percent of respondents admit to renovating to add value and sell their home in 1 – 3 years’ time.
One of the main reasons for renovating is to make life in lockdown a bit easier. Many invest in home renovations to make their home office space as tolerable and pleasant as possible. Spending time in isolation, people need more space and room, whether for video conferencing or leisure activities. They are investing in backyard pools, finished basements, home gyms, equipment, and home furnishings to improve home comfort and quality. A 2021 Scotiabank Housing Poll shows that outdoor work such as decks and landscaping tops the list, with 54 percent of Canadians looking to update their home space. Indoor improvements come second, including basement (17 percent), kitchen (23 percent), and bathroom renovations (32 percent).
It is not surprising that many choose to remodel the kitchen. It is the place where families come together to socialize and eat. Also, many have been filling their days in isolation with at-home meal kits, banana bread, and sourdough starters, coming to realize that their kitchen space needs an urgent update. Whether it is a new color scheme, upgraded finishes and fixtures, or a more functional kitchen space, homeowners have had plenty of time to plan on renovating and perfecting their kitchen.
Bathroom renovations are also popular with Canadian homeowners, and there is a good reason why. With many choosing to work in their garden office, adding a toilet or bathroom to the garden space reduces the time they spend entering the main house. This is also a way to minimize home life distractions and stay productive during the working day.
When it comes to basements, many choose to upgrade that living space they already have. Finished basements commonly include a recreational space, a bathroom, and an extra bedroom or two. Some homeowners also choose to turn their basement into a home gym, adding equipment storage areas, workout equipment, rubber flooring, and mirrored walls.
Tips and Advice on Renovating
Renovating a home can be both time-consuming and expensive. When planning for renovation, it pays to create a budget to find out what you can afford financially and avoid dipping into your emergency fund or long-term savings. Contacting a mortgage or financial advisor can help you to figure out how much you will need for a down payment.
Budgeting for home renovation also means understanding the full cost of labor and materials. Depending on the scope of the project and the rooms you are updating, finishes and fixtures may include flooring, tiles, faucets, knobs, and paint. Calculate shipping costs and taxes as well to get a good idea of the cost of your renovation project. If you are planning on buying new household appliances, make sure you include costs such as delivery and installation, and how you dispose of old appliances. Finally, it is important to calculate the costs of living without a functioning bathroom or kitchen, boarding pets, and living elsewhere during a renovation. If you can create a detailed plan which covers all costs involved, your dealings with contractors will primarily focus on project time estimates and labor costs.
A year and a half into a global economic and health crisis, homeowners are investing heavily into their homes as many are working remotely and spending more time indoors. Popular home improvements during lockdown are garden clearance, landscaping, kitchen and bathroom plumbing, and electrical installations. Many also invest in internal decorating and painting, plumbing maintenance and repair, and garden maintenance. Ultimately, homeowners are looking to improve their quality of life, add value, and make their home more comfortable and inviting when they can finally welcome family and friends inside once again.