Canadian home owners are rethinking how much they spend on home renovations. A new poll from CIBC shows only 45 per cent of Canadians are renovating a home this year, compared to 48 per cent in 2017.
The biggest change, however, is in the amount of money they are investing. The poll shows spending is down seven per cent from $11,800 per home owner in 2017 to just $11,000, the lowest it has been in five years.
“[Canadians] are taking a very practical approach by focusing on lower-cost projects this year,” said Edward Penne, Executive Vice-President, CIBC Personal and Small Business Banking.
The big (and small) spenders in Canada
Out of all Canadians, Ontarians are planning to spend the most money on their homes, but even that amount has taken a significant drop. Last year, home owners invested an average $16,000 in their homes, while this year the amount is only $13,600. Part of this may be due to the spike in prices on the housing market in Ontario and the need for tighter budgets.
Elsewhere in Canada, Albertans are actually spending more than last year, at $8,100 compared to $7,400 thousand in 2017. Home owners there are now the smallest spenders in the country, a far departure from the high spending habits of 2016, where home owners in oil-rich Alberta were spending, on average, $23,000. A similar trend can be seen in British Columbia, where home owner reno spending also took a huge dip between 2016 to 2018.
Now, it seems more people in Western Canada are focusing on budget-friendly projects, such as painting and flooring. In general, this is a trend for most people across Canada, with 54 per cent investing in basic maintenance and 42 per cent planning on landscaping their yards and gardens.
Boomers are staying put
Out of all the Canadians polled by CIBC, most home owners over the age of 55 would rather renovate their home than sell it. However, they’re reportedly planning to spend less than the Canadian average at $10,800, which is down $6,000 from last year.
“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 neighbourhood you love,” said Penner.
Investing in your home
Most people that took part in this CIBC survey (86 per cent) felt that renovating your home is a great investment, but how they prefer to pay for these renovations is split across the board. Nearly two thirds of those polled said they will use cash or savings to spruce up their home, while the rest will pay with some form of credit.
Some people plan to take longer to pay back these purchases, as well. Over 40 per cent said they intend on covering all the costs right away, but a third said they will likely take up to a year. The rest of Canadians said they will take even longer than that.
Those who feel the need to renovate now but don’t have the cash flow at the time may be looking at the different credit options available to them, including personal loans.
Personal loans can be easier to apply for in comparison to other types of financing such as credit cards, or a personal line of credit from your bank. And there are also no restrictions in how you spend a personal loan, so you can invest it all into fixing your home.
However, it’s prudent to compare rates before just going with the first loan offered to you from your bank. The rate you pay on your loan can make all the difference between you paying it off within a year or five years. Luckily, RateSupermarket.ca gives you access to the best personal loan rates within minutes from various lenders across Canada.
CIBC is also providing some tips on how to stay within a budget for renovations this year, which can quickly grow into a big expense. Here are some of their tips:
- Determine exactly the scope of the project.
- Research costs and set a budget.
- Find the best way to finance your renovation and look at possible tax incentives.
- If you’re borrowing, find a low-cost borrowing option. You can easily find low-cost options by comparing rates at RateSupermarket.ca.