Eroding affordability boosting the renovation economy
Eroding affordability in Canada’s hottest housing markets appears to be helping fuel a boost to the renovation industry.
Searches for general contractors across Canada jumped 117 per cent in the first few months of 2017, according to Nancy Peterson, founder and CEO of online contractor review forum HomeStars.
“We’ve never seen that kind of volume,” Peterson said in an interview with BNN Wednesday.
“The data we’re seeing is clear. People are really nervous about moving because the cost of going from your condo or existing house and moving into something larger can be enormous,” she said. “I suspect people would rather invest in their home and stay put and see how they can increase the footprint in their existing space.”
“Last year alone we saw project spending on renovations went from just under $17,000 to $21,000.”
Condo dwellers are also dishing out more on fixing up their homes. Renovation spending on condos is up 40 per cent from last year, more than double the average historical year-over-year increase.
HomeStars data shows the price of renovating a basement, bathroom, and kitchen have all climbed by double digits over the past several years. The costs of home inspections and garage renovations have declined.
But Peterson said renovations don’t need to break the bank.
“The best [return on investment] for your home is actually just simple cosmetics,” she said. “There’s lower-cost painting and just decorating because you’re going to spend a lot less and have a big impact on your home.”
Peterson advises homeowners to do their homework before hiring a contractor.
She suggests calling prospective contractors’ past clients to find out more and make sure the person or company is reputable.
“The biggest red flag is when they want a lot of money upfront. They should not be demanding very much. There should be some materials they’re potentially buying upfront, some designs and drawings. But be careful of what exactly you’re paying for when you start to put deposits down.”