Budget savvy renovators choose cash and savings over credit to pay for
TORONTO, Oct. 21 /CNW/ - A majority (63 per cent) of Canadian renovators plan to take advantage of the federal government's home renovation tax credit this year and close to half (47 per cent) have done more renovations because of the tax break, according to a new RBC study.
The survey, conducted by Ipsos Reid, also found that three in four Canadians (76 per cent) who are planning to renovate will pay for most or all of it with cash or savings, compared with 70 per cent in 2008, signaling a shift in the way Canadians view home improvement financing. Fewer renovators, 24 per cent, plan to use a credit card to finance their renovation this year, compared with 32 per cent in 2008.
"It's not surprising that Canadian renovators are getting smarter with their renovation financing and avoiding debt in light of the current economy," said Marcia Moffat, RBC head, Home Equity Financing. "Whether they plan to fix up and sell or renovate and stay, most are taking advantage of tax credits and incentives. They're also planning to use cash or lower interest credit to finance those renovations."
Although more homeowners say they have completed renovation projects this year as a result of the tax credit, the RBC Renovation Study found that fewer Canadian homeowners (66 per cent) intend to renovate over the next two years (compared to 70 per cent in 2008). While intentions to renovate are down, potential renovators anticipate spending more on their renovations with the average amount moving up steadily to $11,272 in 2009 from $8,834 back in 2005. Sixty-two per cent are renovating to make their home more attractive, while 18 per cent are doing so to make their home easier to sell.
Many renovators (35 per cent) plan to focus on upgrades only including exterior renovations (67 per cent), general renovations such as painting and floors (64 per cent), bathrooms (41 per cent) and kitchens (36 per cent).
As for the biggest renovation headache, most homeowners complained of going over budget (30 per cent) and almost one third (32 per cent) said the time it took to complete the renovations was worse than expected.
"Renovating is often fraught with frustration and it's easy for costs to rise by adding small projects until you're over budget and behind schedule," added Moffat. "The best course of action is to expect the unexpected and prepare with advance planning, a realistic budget and flexible financing options at the outset."
Renovations by the Numbers
Intentions among Regions Average Spend
B.C. - 65% $10129
Alberta - 64% $12374
Sask/Man - 73% $15133
Ontario - 67% $12428
Quebec - 65% $ 7734
Atlantic Canada - 72% $12586
Renovate or Sell/Move
Region Renovate Sell
------ -------- ----
B.C. 66% 25%
Alberta 67% 27%
Sask/Man 72% 22%
Ontario 69% 25%
Quebec 78% 16%
Atlantic Canada 78% 15%
These are some of the findings of an RBC poll conducted by Ipsos Reid between September 8 -16, 2009. The online survey is based on a randomly selected representative sample of 3,120 adult Canadian homeowners of whom 2,050 plan to renovate within the next two years. With a representative sample of this size, the results are considered accurate to within +/- 1.8 percentage points, 19 times out of 20, of what they would have been had the entire adult Canadian population been polled. The sample's composition reflects that of the actual Canadian population according to Census data.
For full tabular results, please see the Ipsos Reid website at www.ipsos.ca.
For further information: For further information: Media Contact: Matt Gierasimczuk, Media Relations, (416) 974-2124; Jacqui van der Jagt, Corporate Communications, (416) 974-1756