According to many in the renovation industry, investment in home renovations is on the rise and the trend is expected to continue in 2021. Are you prepared?
The Covid-19 pandemic we’ve been living with since last March will not have had only negative impacts. Home improvement has seen an unprecedented increase, primarily because many who are confined to their homes have opted to dust off their toolboxes as a way to keep busy. Others have turned to contractors to help them spruce up the living space in which they now spend almost all of their time. The result: big box stores were stripped bare and certain materials quickly became difficult to find. With the lockdown expected to continue for several months still, the renovation craze in Canada is likely to continue as well.
A major economic contribution
Spending on home renovations in Quebec is substantial. The APCHQ, Canada’s largest association of construction contractors, estimates $30 billion has been spent on home construction and renovation, with the latter gaining increasing significance when compared with new constructions. In 2019 almost $4 billion more was spent on renovations than on new constructions. In 2020, there was an 8% increase in renovation spending. And the trend should continue, says Paul Cardinal, director of economics at the APCHQ.
“In 2021 we forecast investment to increase by 16% — a strong rebound — with spending expected to reach $15.8 billion. And that’s not counting home maintenance expenditures like changing gutters and standard repairs, which are expected to add another $3 billion. Another factor in the increase in spending, Cardinal adds, is the home resale market, which has been hot for months. “According to the Canadian Real Estate Association, each home sale involves $16,000 in renovation expenses,” states the economist. And with interest rates very low for both mortgages and lines of credit, the trend is expected to continue.”
An unprecedented labour shortage
Fundamental question: Can the construction industry support all of this additional demand? In total, 150,000 jobs are directly linked to these investments. Despite the phenomenal spending in the renovation industry mentioned earlier, many potential clients were unable to complete their renovations because contractors couldn’t keep up with the demand. Over at the Association des maîtres-couvreurs du Québec, Quebec’s association of master roofers, even if official statistics aren’t available, we’re told that multiple client requests could not be fulfilled and that all of these projects have been delayed until spring 2021. The slowdown on construction sites due to the lockdown, combined with a lack of succession, meant that several projects couldn’t be completed. How, then, will all of the renovations scheduled for next spring be carried out?
For François Bernier, Senior Vice-President of Public Affairs at the APCHQ, it will take a redoubling of efforts to make the construction trades attractive to younger generations. “We take the pool of construction workers for granted, but we need to increase it substantially if we are to meet future demand. Several promotional campaigns need to be deployed in order to publicize the benefits — including high wages — and the diversity of jobs in the sector.” According to Mr. Bernier, we should promote the construction trades, as well as those in the renovations sector, as soon as schooling begins. “There are great opportunities for the future. Just as now, people who have lost their jobs as a result of the pandemic should be encouraged to return to the workforce in a construction trade.”
Spring 2021 renovations hard to predict
For Richard Darveau, president of the Quebec Hardware and Building Supply Association, spring 2021 could be a repeat of what we experienced in 2020…or not. “The renovation surge in Quebec — and the 20% increase in sales — can be explained by highly variable factors,” he says. “First, people had time on their hands. Confined to their homes, they decided to invest in renovations. And because hardware stores remained open, materials were readily available. But here’s the thing: a shortage of these materials has been created by factors other than demand. Railways were blocked by Aboriginal communities. Cargo ships and airplanes were mobilized either to repatriate Canadians or to procure personal protective equipment from outside the country due to Covid-19. Hardware stores, grocery stores and pharmacies ended up with empty shelves.”
But to make a prediction for spring 2021, Darveau believes As for supply, Mr. Darveau believes that Quebec is faring quite well in the construction materials sector, with between 150 and 200 local product manufacturers. In his opinion, the supply chain should recover quickly.
Plan timelines carefully to avoid unpleasant surprises
In any event, it’s crucial to plan your work meticulously. Not only do you need a schedule and a budget, but you also need to determine the best time period in which to do the work. For example, if you’ve planned to have your roof redone, there are times when it’s virtually impossible (winter, for example). If you want to spend next summer on your new deck overlooking your new swimming pool, these contracts would need to be negotiated at the start of winter to avoid the spring rush.
Either way, you’ll need to plan the timing of the renovations, check with the municipality to find out if a permit is needed, and prepare the future construction site to avoid obstacles and the related expenses and delays. You’ll also need to verify that the contractor has all the required licenses and that they will respect the deadlines and any guarantees offered.
Types of renovations that influence property value
Whether a house is about to go on the market or not, there are several types of renovations that impact its value. Maintaining a property’s value takes time, effort, and … money. Take maintenance work, for example: Driveway asphalt must be maintained to prevent water infiltration and cracks in winter. Insulation around exterior windows should be redone approximately every ten years because heat and cold decrease its effectiveness. Straight fences, clean windows, and a well-groomed lawn are also part of normal maintenance and speak to the type of homeowner you are.
Structural renovations are certainly the most important when it comes to increasing the value of your home. ‘Structure’ comprises all of the aspects of the house, namely the heating system, plumbing, electricity, roof, house exterior (repair of bricks, plaster, aluminum or wood surrounding the house
And then there are all the updates. The most substantial investments that homeowners will make are certainly kitchen and bathroom renovations. Both are high-ticket items because they involve hiring and coordinating several different suppliers (plumbers, electricians, plasterers, carpenters, kitchen designers, etc.). These updates can add considerable value to your property, but be careful not to overdo it: tastes differ greatly from person to person, so it’s wise to keep your choices timeless and understated.
Financial support for renovations
Several renovation and energy efficiency assistance programs are offered in Quebec and Ontario. The majority of these programs will be renewed in 2021 and announcements are also expected from the federal side for the coming year. Note that several municipalities also offer financial support for the renovation and revitalization of certain neighbourhoods and the transition from oil heating to clean and renewable energies. Any requests for assistance should be included in your planning so that next spring everything will be in place to give your property a new lease on life!
Thinking of renovating and would like to be guided through the process?
Trust the Renovation Advisors at RenoAssistance. In addition to recommending the best Verified Contractors for your project, they’ll help you evaluate the various estimates you receive and guide you through the steps, making the entire process easier for you, with no cost or obligation.