Canadian homeowners are opting to put their savings towards renovating the homes they live in rather than selling and buying a new one, a recent CIBC poll suggests.
This year, 48 per cent of Canadian homeowners surveyed plan on renovating their current residence, according to the bank’s latest annual home renovation poll.
The CIBC survey results are based on the responses of more than 2,000 homeowners across Canada this month.
On average, these homeowners plan on spending $11,800 on reno projects, down from about $13,000 last year and roughly $12,300 in 2015.
In Canada’s hottest market, the Greater Toronto Area (GTA), 46 per cent of homeowners plan on giving their abode a makeover in the next 12 months.
Last month, the average price of a home in Canada was $559,317. Sales activity in Canada’s most expensive markets — the GTA and Greater Vancouver — continue to drive up national statistics, says the Canadian Real Estate Association.
National home prices in April were up 10.4 per cent from a year before, and the strength of markets in many of Canada’s largest cities continue to impact homeowners’ decisions to stay put.
“People are really saying that ‘this is not the time to move up into a bigger, larger, newer home. This is the time to spend some of our existing savings and use that for home renovations,” Jamie Golombek, managing director of CIBC Wealth Strategies tells BuzzBuzzNews.
The primary reason Canadians cited for renovating was general wear and tear. Some 32 per cent of respondents identified this as the impetus for home improvements, followed by 25 per cent who cited cosmetic purposes. Twelve per cent said increasing the value of their home before putting it on the market was behind their plans.
Out of all regions, homeowners in Ontario and British Columbia plan on spending the most on repairs at roughly $16,000 and $13,200, respectively.
Homeowners in the GTA plan on spending the most on renos at an average $21,340.
Instead of buying in today’s white-hot GTA market, 69 per cent of homeowners there say they would rather choose the less stressful option of renovating — the greatest share among Canadians in any local market.
With the average price of a home in the GTA at $920,791 in April, it’s no surprise that 58 per cent of respondents living there are choosing to repair their homes instead of selling and buying another.
“This is consistent with the message that we’re hearing out there on the streets that with housing prices so high, Canadians do love living in their homes and they want to make them as nice and enjoyable as possible,” says Golombek.
It appears most Canadians won’t have to borrow funds in order to spruce up their dwelling: 67 per cent of homeowners will use cash or savings to pay for their projects.
Meantime, 25 per cent of Canadians renovating say they will use either a line of credit, loan or credit card to cover the cost of repairs.
Yet most homeowners planning on staying out of debt to fix up their home don’t have a clear plan of action to stay within their means.
“The fact that they’re using either savings or cash to be able to fund those renovations is positive. Unfortunately more than half of them don’t actually have a detailed budget,” says Golombek.