When it comes to things breaking down or needing repair and updating in a home, it seems that most Canadians would rather fix it than nix it, according to the 19th Annual RBC Homeownership Poll. Results from that survey show that 63% of Canadians would rather make home renovations than find a new place to live, and 75% of respondents didn’t think they’d spend more than $10,000 to make those renovations. The methods of actually paying for the renos differed, as did the reasons Canadians wanted to renovate.
66% of those polled said that they wanted to renovate simply to make their home look better, while 46% said it would be to increase the resale value of the home. That may not be surprising given higher home prices right now, and how hot the entire Canadian housing market is. Renovating to maintain or repair their home, and renovating for energy-efficiency purposes tied with both getting 39% of the results.
Canadians also seem to be listening to the experts when it comes to what renovations they should be making. Bathrooms and kitchens, the two homes that add on the most value and are the most popular, remain so with each getting 43% of respondents saying that they’d be doing work on these rooms in their home; while 33% of participants said that they would be finishing their basement. More Canadians are also starting to hire contractors to complete the work, 42% of us, which is 5% more than it was when RBC conducted the same survey in 2010.
What might be most encouraging about the study, and what should make Bank of Canada governor, Mark Carney, and Finance Minister, Jim Flaherty rest easy, on this issue at least, is the fact that the majority of Canadians – 71% – said that they would pay for their home renovations with cash or savings. Of those that would borrow for the renovations, 15% said that they would use a HELOC; 13% said that they’d be using another form of home equity financing; 10% said that they would use credit cards; and only 4% said that they would be using personal loans.
Those stats are right in line with what Richard Goyder, vice-president of Personal Lending at RBC, has to say on the subject. He reminds homeowners, “Your renovation checklist should include talking to a financial expert to assess all of your financing options. Consider innovative, flexible financing options, such as financing products that combine the benefits of a credit card and a personal loan, to help you achieve your renovation dreams.” And, with the majority of borrowers using HELOCs to pay for their home renovations, it seems as though that’s just what they’re doing.
