Getting a home equity loan or a home equity line of credit can be a great way to pay for home renovations. But perhaps Canadians are starting to heed Mark Carney’s warnings about debt as fewer of us embarked on home renovations last year; and the majority of those that did chose not to borrow in order to pay for them.
The findings came from the Canada Mortgage and Housing Corporation (CMHC) Renovation and Home Purchase Survey – a survey that analyzes the number of homeowners across the country that made home renovations for the previous year, and how homeowners paid for them. This year’s survey shows that renovations were down in 2011 with only 37 per cent of homeowners making renovations, compared with 42 per cent in 2010. However, the value of the renovations in 2011 increased in value to an average of $13,709 per household, up from 2010’s average of $12,972. However, while these results show slight decreases and increases when compared side by side, there is not really much difference from year to year.
Mathieu Laberge, Deputy Chief Economist at CMHC said in a statement to go along with the survey, “Almost $21 billion was spent on renovations in 2011 across the 10 major centres surveyed, a decrease from 22.8 billion in 2010. As well, when Canadian homeowners were asked abotu their renovation plans for this year, 38 per cent indicated that they intend to spend $1,000 or more by the end of 2012. Renovation intentions for 2012 are similar to the 2011 results.”
The survey also dissected where in the country renovations were made, and where they’re most likely to be made. Here are the findings:
- St. John’s, Newfoundland had the most amount of renovations in 2011, at 43 per cent. Here, 48 per cent of homeowners also said that they plan to make renovations in 2012 that will cost more than $1,000.
- 42 per cent of homeowners in Quebec reported making renovations in 2011, but only 37 per cent plan to do so this coming year.
- Vancouver saw the lowest amount of home renovations with only 33 per cent of homeowners taking on projects. Vancouver will also see the fewest renovations in the coming year, with only 34 per cent of homeowners saying that they’ll be taking on renovations in 2012.
- 42 per cent of homeowners in Halifax, Ottawa, and Edmonton say that they will be making renovations this year.
- Toronto and Calgary both found 38 per cent of homeowners that will be making home renovations in 2012.
In addition to how many people did make home renovations, and how many will, 68 per cent of homeowners said that their debt level did not increase due to the renovations. That is an encouraging increase of the 66 per cent that said the same in last year’s survey.