Canadian Real Estate Renovation Trends (2021)
Canadians are investing in renovations to improve the quality of life, not to add value to the current Canadian real estate market
- The challenging conditions in the Canadian real estate market have added extra importance to home renovations since the beginning of COVID-19, both for those looking to stay and those looking to sell
- More than half of Canadians renovated their home in 2020 with the intention of living in it. 29% renovated to improve their lifestyle for non-essential reasons (aesthetic and / or recreational purposes) and 29% for essential reasons (safety and maintenance)
- Only 16% of Canadians said they renovated to add the market value of their home and are selling within the next one to three years
A new report from RE / MAX Canada highlights changing consumer trends in home renovation and the perceived return on investment (ROI) impacted by COVID-19 and historically tense conditions in the Canadian real estate market. The RE / MAX 2021 renovation investment report found that more than half of Canadians renovated their homes in the past year for personal or “non-ROI” purposes. Three out of ten (29 percent) decided to renovate for non-essential “lifestyle” reasons, e.g.
A Leger survey conducted on behalf of RE / MAX Canada found that lifestyle impacts are the primary reason for renovation as the pandemic progresses, before motives such as major renovations are undertaken to accommodate life in the lockdown Percent) or increasing the value of the house with the intention of selling it in the next one to three years (16 percent).
Despite the trend of home renovations for personal use and pleasure, 59 percent of Canadians still said they always consider the return on investment that renovation will have on the total market value of their home. So there is a current home renovation trend based on lifestyle ambitions, practicality is never far from the surface.
“The notion of home ownership as an investment continues to be an important consideration for Canadian homeowners. However, they clearly value home for what it is meant to be: a place to live and enjoy time, ”said Elton Ash, RE / MAX’s Regional Executive Vice President in Western Canada. “The pandemic has affected virtually every aspect of our lives, including what Canadians want and need in a home. The uncertainty also forced many sellers to marginalize or renovate their homes to meet current quality of life demands, which has further exacerbated conditions in many Canadian real estate markets. “
This shortage of inventory is expected to be a persistent factor in the spring property market across Canada. In its market outlook for 2021, RE / MAX identified the seller’s market conditions in 82 percent of the regions, with a significant surge in demand for single-family homes putting additional pressure on already limited supply.
“Canadian real estate has continued to perform above expectations and given current demand for sellers a greater opportunity to get a strong return on their investment,” said Christopher Alexander, chief strategy officer and executive vice president of RE / MAX in Ontario. Atlantic Canada. “As we saw last year, strong seller markets continue to dominate many regions across Canada. Properties are being sold in record time and at record prices. While the impact of certain renovations on ROI depends on regional conditions, the Canadian real estate market in general has shown us that you can’t go wrong with improving your home in any way. “
With that in mind, Canadians are still making renovation decisions based on a pandemic life almost a year after overseas lockdowns began. More than half (55 percent) of those surveyed said they had already done so or would like to do a home renovation within the next year. Of this group, 35 percent say they would choose to do minor renovations such as painting.
RE / MAX brokers across Canada were also interviewed and identified for the report fresh paint and landscaping as two improvements that get a high ROIeven though they are on a budget and small in nature. This is in line with, and good news for, nearly half (47 percent) of Canadians who said they would want to keep their home improvement budget under $ 10,000 even if the guaranteed ROI was at least 10 percent. Three in ten Canadians (31 percent) would increase their spending from $ 10,000 to just under $ 50,000, and only four percent would consider spending more than $ 50,000.
65 percent of the RE / MAX brokers surveyed also claim this Kitchen upgrades, including cabinets, countertops, and appliances, produce the highest ROI for sellers87 percent of realtors named the kitchen renovation as the best home improvement project to appeal to buyers in the Canadian real estate market.
Renovations and Canadian Real Estate: Regional Market Insights
in the Western CanadaIn Calgary, Edmonton, and Victoria, homebuyers want the move-in experience, with fully renovated homes being the most sought-after. With this in mind, sellers in these regions have the potential to generate high returns on their renovation investments. In the greater Vancouver area, outdoor improvements are one of the best ways for homeowners to get the best ROI. Landscaping is one of the top five renovations. It’s also one of the most common renovations that homeowners in this region do themselves rather than hiring a professional to do the job.
While OntarioRE / MAX brokers report that listings sell quickly regardless of their condition or renovation status. Regions like Toronto, Ottawa, Hamilton-Burlington, Niagara, London, and Kingston / Napanee saw a sharp shift in 2020 towards upgrades and outdoor amenities, particularly the addition of a pool or larger outdoor living area. Much of this demand was driven by COVID-19 and the desire for more recreational space inside the home – a trend that is not expected to be permanent. Bathroom renovations and new floors are considered to be the best return on investment. In markets like Mississauga, Thunder Bay, London, Barrie, and Ottawa, RE / MAX realtors painting is viewed as the best renovation homeowners do themselves and one of the best ways to get an improvement on ROI as well.
in the Atlantic Canada In the provinces, RE / MAX brokers also valued upgraded kitchens, but named upgrading floors one of the best renovations for homeowners to get the best ROI in regions like Fredericton, Saint John, and St. John’s. In Charlottetown, roof improvements and landscaping are two of the most important renovations that can be done relatively quickly to improve ROI, along with the paint job, as confirmed in almost all of the regions studied. In Saint John, the finished basement is one of the most sought-after renovations from buyers. Creating spaces with a more open concept is considered to be one of the top three ways for sellers to get the best return on their investment.
Understanding Consumers of ROI
Only 51 percent of Canadians said they had a thorough understanding of the renovation process, and nearly half either didn’t know or disagree that they have the necessary understanding to make decisions about improving ROI. In addition, 50 percent of Canadians surveyed said that they expect their REALTOR® to advise them on the right renovation work if they showed an interest in buying a home. It is expected that this reliance on outside professionals in the home purchase decision will continue.
Further highlights from the RE / MAX Renovation Investment Report 2021
- When it comes to the renovations that will bring the best return on investment, Canadians see these as the best renovations:
- 70% of Canadians say they are redesigning larger rooms such as kitchens or washrooms
- 56% of Canadians report minor updates, e.g. B. refreshing color
- 55% of Canadians say they design the outdoors
- 50% of Canadians report having changed the layout of the house, including adding rooms or tearing down walls
- 32% of Canadians report updating decor and furniture
- 49% of Canadians prefer to outsource most or all of the renovations
- 33% of Canadians consider themselves very capable when it comes to home renovations and do not need professional help
Information on the investment report for the RE / MAX renovation 2021
RE / MAX Renovation Investment Report 2021 features data from RE / MAX brokers. RE / MAX brokers and agents are asked about findings and local developments. Regional summaries with additional broker insights can be found at remax.ca.
Leger is Canada’s largest full-service market research company. An online survey of 1,540 Canadians was conducted between February 4 and 7, 2021 using Leger’s online panel. Leger’s online panel has around 400,000 members nationwide and a retention rate of 90 percent. A probability sample of the same size would give a margin of error of +/- 2.5 percent, 19 times out of 20.