Mortgage rates drop and boom – homeowners are in the mood to borrow a little more to finance a new kitchen renovation.
New poll results released Thursday from CIBC suggest many homeowners are planning some reno work again this year and the amount of money they plan to spend has jumped considerably.
Forty per cent polled said they are planning some work, which is up a modest one percentage point from the same poll last spring. But spending intentions have soared 30 per cent.
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The average expected cost of renovations among those planning them is just under $20,000 – up from $15,300 in the spring of 2013 when sentiment surrounding the real estate market was far gloomier.
But with home prices happily marching upward and many housing experts suggesting the market will moderate, or glide into a “soft landing” rather than crash, the CIBC poll points toward renewed appetite for loans to fix up the place.
“Home renovation will continue to be a big business in Canada this year,” Todd Lawrence, a senior vice-president at the bank, said.
That sentiment breaks with the view voiced by TD Bank and others that the home renovation market – which has boomed alongside the housing market into a $46-billion industry – is poised to slow.
Last fall, TD suggested growth in total renovation spending would fall by half, and by 2015, the retail renovation supplies market would contract by two per cent.
The main reason for TD’s expectations: Slowing home sales and housing activity as Canadians look toward paying down “exceedingly elevated” debt levels, in the words of the Bank of Canada.
Another CIBC poll from earlier this year found that the top financial priority for Canadians in 2014 was paying down debt.
“Enjoying the benefits of renovating your home really begins with getting your financial house in order and knowing what you can afford,” CIBC’s Lawrence said.