RSSIntentions to Renovate and Buy a Home Both Decline in 2008
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Canada Mortgage and Housing Corporation (CMHC) recently released the results from its annual Renovation and Home Purchase Survey. Some of the highlights from the report are as follows.
An estimated 1.5 million households were surveyed in 10 major centres − St. John’s (Newfoundland); Halifax; Québec City; Montréal; Ottawa; Toronto; Winnipeg; Calgary; Edmonton; and Vancouver.
Actual Spending in 2007
Nearly 60% of respondents said that their main reason for renovating in 2007 was to “update, add value or prepare to sell”. On the other hand, for almost a third of respondents, the main reason for undertaking the work was that their home needed repairs.
The three major renovation projects in 2007 were: (1) remodeling rooms (37% of respondents); (2) painting or wallpapering (27%); and (3) hard surface flooring and wall-to-wall carpeting (26%).
Contracting out the entire project accounted for over 40% of total renovation projects in 2007. The remainder was either done by contractors hired for a portion of the job (26%) or was “do-it-yourself” (DIY) work (31%).
Finally, in reviewing 2007 activity levels, the average value of all renovation projects carried out last year was $12,800.
Intentions in 2008 compared with Intentions in 2007
For 2008, 40% of households surveyed indicate that they intend to spend $1,000 or more on renovations by the end of this year. However, in 2007, the comparable figure was 46%. Therefore, there has been a significant percentage point decline of 6.0.
By city, renovation intentions have dropped most dramatically in Montréal (-11 percentage points) and Québec City (-10). Ottawa, Calgary and Edmonton have all recorded declines of 6 percentage points. Vancouver is down by 5 and Toronto and Halifax are down by 2. Winnipeg remains flat, while St. John’s is the only city with an increase in intentions to renovate (+2 percentage points).
In terms of the absolute percentage of households in each city that intends to spend $1,000-plus on renovations in 2008, Winnipeg (50%) is on top, followed by St. John’s (48%) and Halifax (46%). At the bottom of this ranking are Québec City (35%), Montréal (36%) and Vancouver (38%).
Finally, it is interesting to note that the percentage of households saying that they intend to buy a new home for permanent residence has also dropped, to 6%, in 2008 versus a figure of 8% in last year’s survey for 2007. No cities recorded an increase, although Ottawa stayed the same at 7%. But the shockers were Calgary (from 14% down to 8%) and Edmonton (from 11% down to 7%).
As for those who do intend to buy a home in 2008, 42% will be first-time buyers. This is the same proportion as in 2007. The prime first-time homebuying age is between 25 and 34, with a household income ranging from $40,000 to $60,000 annually.
For CanaData’s latest housing starts forecasts, see Market Insights story dated April 22, 2008.
Alex Carrick
Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News.
