Poll conducted by Harris/Decima reveals more than one-third of Canadian homeowners plan to take on some form of home renovation project this year, with an average expected renovation cost of just over $15,000.
Highlights of the poll include:
- $15,300 is the amount Canadian homeowners say they will spend on their home renovations this year, on average
- 39 per cent of Canadian homeowners say they plan to renovate their home in the next 12 months
- Among Canadian homeowners planning to renovate, Alberta homeowners plan to spend the most on their home renovations this year ( $22,900 on average), while Atlantic Canadians say they plan to spend among the least ( $11,000 on average)
- Regionally, Alberta residents are among the most likely (52 per cent) to say they plan to renovate their home in the next 12 months, while British Columbians are among the least likely with only 25 per cent of home owners saying they plan to renovate
- Among demographics, Canadians aged 45-54 plan to spend among the most on their home renovations this year ( $18,300 on average), nearly $3,000 more than the national average
"Whether it's replacing an old roof or updating a kitchen, home renovations can help you get more out of your property, but you do need to consider how the costs will fit with your overall financial plan," said Colette Delaney, Executive Vice President of Mortgage, Lending, Insurance and Deposit Products, CIBC.
Previous CIBC research shows that Canadians named paying down debt as their top financial priority for 2013, suggesting that those Canadians taking on a home renovation will need to keep a close eye on their renovation budget to stay on track towards their financial goals.
"Most people taking on a renovation have a clear vision of how they want their home to look when it's done. Our message is you need the same clear plan for repaying any debt you might incur along the way," added Ms. Delaney.
HGTV's Scott McGillivray Notes that Planning is Key to a Successful Renovation
Scott McGillivray, host of HGTV's "Income Property", also stressed the benefits of planning when it comes to making improvements to your home while managing your budget.
"The most important part of a renovation is the planning. It sounds cliché, but planning really is half the battle. In my experience, the homeowners who plan ahead are also more likely to be happy with the end result, and are better at sticking to their budget."
For Canadians looking to stretch their renovation budget, it's important to prioritize your renovations by mapping out where you are going to invest within your home, and how much money you will need to allocate to each job.
"Kitchens and bathrooms are always value-adds, so if you're prioritizing your renovations and looking to make your dollars go further, plan on doing those rooms first," added Mr. McGillivray "I also like to add an income suite in where possible, but that's a personal choice."
Renovation Tips from Scott McGillivray:
To make sure you stick to your renovation budget, while getting the greatest return on your investment, Mr. McGillivray offers the following tips:
- Plan the Work: You don't want to be in the middle of a home renovation project when you realize you are unable to meet your timeline or budget, especially if you are operating with a tight budget.
- Set your Priorities: If you are taking on multiple renovations, decide which ones are the most important to you, and tackle those first. Kitchens and bathrooms make good choices for a renovation because of the potential to add value to your home.
- Expect the Unexpected: Regardless of how much you plan in advance, leave a cushion in your budget for the unexpected. You should aim to have a cushion of 20 per cent to over any unexpected costs.
- Get it in Writing: You should always get quotes from contractors before any work starts, have a signed agreement on the scope of work they will be doing and everything that's included. You also need to be clear on what's not included so that you'll know about any expenses that will be your responsibility.
Financing Advice from CIBC:
To help fund their home renovation, CIBC offers the following tips:
- Draw on Savings - if you are able to draw on savings to fund part or all of your renovation, it may be the best option. Be sure to leave yourself some emergency funds in your savings account so that you still have a cushion against other unexpected expenses that can arise.
- Choose a Low Cost Borrowing Option:
- A secured line of credit, like CIBC's Home Power Plan, offers Canadians with equity in their homes a low cost borrowing solution that can be used to finance expenses such as home improvements. CIBC's Home Power Plan provides Canadians the fixed payment schedule of a mortgage with the flexibility of a line or credit, and the ability to access the funds whenever you need them, should you need to make a future repair or in the event of an emergency.
- An Unsecured Line of Credit (UPLC) is another option that can be used to finance home renovations. An Unsecured Line of Credit represents a good option for borrowing of smaller amounts with a plan in place to repay the amount owing.