Canada’s housing market caught fire in mid-2020 and that spurred more than half of the country’s homeowners to renovate their existing abodes either to remain in place or to sell, says a new report from RE/MAX.
The RE/MAX 2021 Renovation Investment Report, which involved a survey conducted by Leger Marketing, found 29% of Canadian homeowners also renovated their homes last year to aesthetically improve their homes, while another 29% undertook renovations for essential reasons, like safety and maintenance. Fifty-nine percent of respondents were cognizant of the additional value a renovation would provide their homes.
“The notion of the home as an investment continues to be an important consideration for Canadian homeowners, however, they clearly value the home for what it is meant to be: a place to live and enjoy spending time,” said Elton Ash, RE/MAX of Western Canada’s regional EVP. “The pandemic has influenced virtually every aspect of our lives, including what Canadians want and need in a home. The uncertainty also compelled many sellers to move to the sidelines or renovate their home to accommodate current quality-of-life needs, which has further tightened conditions across many Canadian real estate markets.”
The RE/MAX report also noted that in Ontario, from Kingston to London, listings sold quickly in 2020, regardless of their renovation status. Most renovations focused on outdoor upgrades.
A separate report recently released by Sotheby’s International Realty Canada demonstrated that home renovations bolstered price gains in the luxury segment of the housing market. The most common types of renovations, according to the report, involved outdoor spaces with gardens and landscaping, patio and deck upgrades, outdoor kitchens and dining areas, outdoor theatres, waterfront docks, and personal sports facilities, like pools and ball courts and children’s play amenities. Indoor upgrades typically involved kitchens, home offices and the addition of personal fitness areas and theatres.
A dearth of luxury listings in Canada’s three largest cities served as the impetus for luxury buyers choosing to buy properties in need of renovations, which is a departure from their usual buying habit of move-in ready properties.
“Prospective homebuyers are now more likely to be willing to purchase properties that require repairs and updates due to a lack of other options in their desired neighbourhoods. Others are purchasing luxurious move-in ready properties and renovating to meet bespoke personal preferences. While this renovation trend is largely driven by end-users, market confidence is also motivating investment-minded buyers to purchase homes for renovation in anticipation of future resale at a higher price.”