BuzzBuzzHome: Brendan Charters doesn’t expect his calendar to clear up anytime soon. The co-founder of Eurodale Developments in Toronto says the remodelling industry has progressively gotten busier and busier since he started the business in 2003.
“For the last ten years, we’ve been booked out anywhere from six months to a year in advance,” he says.
Charters has his hands full working on overhauling city homes, largely in the midtown area, with many of the 1930s-era houses needing better waterproofing, new pipes or modern mechanical systems.
The other trend in Toronto? More and more of his clients are intent on maximizing every square inch of property available. Forget simple aesthetic upgrades – homeowners are choosing basement build outs and expansive additions.
“Years ago, a $400,000 project would have been a big project,” says Charters. “Now it’s not uncommon to have $700,000 or even $800,000 spent on a reno.”
Remodeling fever isn’t limited to Torontonians. It appears Canadians are a house proud bunch, spending more and more money on revamps and restorations. In the third quarter, Statistics Canada reported renovation spending reached $13.9 billion nationwide, an 8.9 per cent jump over last year.
Spending on sprucing up existing housing stock has even outpaced investment in new dwellings, which reached $13.2 billion in the third quarter.
The phenomenon of Canadians putting more money into refurbishing existing homes than on new builds is a new one. It’s a story of “love the one you’ve got,” as big cities see land values skyrocket while interest rates remain low.
“Historically, we haven’t really seen that other than brief periods during recessions, so it’s a pretty meaningful shift that’s gone on,” says Robert Kavcic, Economist at the Bank of Montreal (BMO).
In a research note published this fall, BMO found more money was spent on renovations than on new dwellings in the last 12 months, ending in June, with Canadians spending $48.4 billion and $46.3 billion, respectively.
Kavcic doesn’t have a black and white answer as to why this is happening, but does cite building constraints in major cities such as Ontario’s Green Belt plan, which protects land from development in and around the Greater Toronto Area, as well as the limited land availability in Vancouver.
“Rates are low and homeowners have a lot of equity in their homes so those renovations become reasonable, or available. Plus there’s just not a lot of room to build out so younger couples have to buy up older homes that they have to fix up to get a decent location in the city,” he says.
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