Who says 20-somethings living in their parents’ basements aren’t an economic driver?
Young adults aged 20 to 29 are taking more time to take flight from the nest, and a report this week from Canada Mortgage and Housing Corporation suggests this is one of the factors encouraging booming reno activity in Ontario.
“Housing needs change as a household ages, which will require adapting the current home to meet ever-changing needs,” the Canada Mortgage and Housing Corporation (CMHC) report reads.
“With a large share of young adults staying home longer due to economic and academic considerations, the need for space will remain important,” it continues, noting last year, Ontario’s reno market was a $25 billion business, based on household spending.
CMHC expects reno activity in Ontario to further ramp up, and Ted Tsiakopoulos, its regional economist for the province, drilled down into other reasons the national housing agency expects spending on renos in the province to continue to swell.
“Ontarians are aging, the housing stock is aging, home prices are on the rise and more homebuyers are turning to the resale market — all these factors support renovation spending,” says Ted Tsiakopoulos in a statement.
More than half of Ontario’s homes — 57 per cent, to be exact — were built before 1980, according to 2011 census numbers, suggesting there are plenty of homes out there in need of some TLC.
And an aging population is supportive of reno activity because households typically aren’t interested in the idea of moving as they get older, says CMHC.
This less mobile demographic won’t move unless for reasons related to health and finances, or simply to be closer to friends and family, the agency observes. Long-running census numbers suggest there’s an 80 per cent chance households over the ripe age of 55 would rather stay put.
Older households are also generally in a better financial position to take on a project than their younger counterparts.
Provincial resale activity, on track to hit an all-time high in the GTA this year, is linked to reno activity as “Ontario households undertake renovation work typically within 12 months of an existing home purchase,” says CMHC citing its own analysis.
Ontario reno spending isn’t topping pre-recession levels of growth, CMHC notes. But the business is twice as big as it was in 2000, at least relative to the province’s overall economy. Its expected to make up around 4 per cent of the GDP in the coming years.
Ontarians are improving the curb appeal of their dwellings with landscaping, and they’re giving other rooms facelifts, as well as slapping on new coats of paint and wallpaper, CMHC says, laying out popular projects.
Of course, they’re also upgrading their basements — young adults who have yet to move out have got to live somewhere, after all.
