Home renovation budgets down for Canadians in 2015: CIBC Poll

HGTV's Scott McGillivray offers advice on getting the biggest bang for your renovation buck as new survey finds that homeowners plan to cut their annual reno budgets

TORONTO, May 8, 2015 /CNW/ - A new CIBC (TSX: CM) (NYSE: CM) poll conducted by Nielsen finds that while Canadian homeowners remain focused on home renovations, they have cut their 2015 budgets. The poll shows Canadians plan to spend an average of about $17,000 this year - down from almost $20,000 in 2014.

While projected budgets are down, the number of homeowners planning to renovate has remained high at 42 per cent this year in line with 40 per cent last year.

Highlights of the poll include:

• $17,142 is the average amount that Canadian homeowners who plan to renovate say they will spend on renovations in 2015 - down by 13 per cent from $19,754 in 2014
• "Big ticket" renovation plans edged lower - 16 per cent of homeowners say they will spend more than $25,000 on renovations, down from 18 per cent in 2014
• Basic home maintenance (64 per cent) such as painting, flooring, general repairs and replacing appliances is the top planned renovation, followed by outdoor landscaping (32 per cent), upgrading bathrooms (29 per cent) and kitchens (28 per cent)
  
  
• The harsh winter took its toll on the homes of Canadians - 13 per cent of Canadians are planning home repairs this year to fix weather-related damage

"While Canadians continue to invest in renovations, they are taking a very practical approach in 2015 focused on lower-cost projects," says Barry Gollom, Vice President, Mortgages and Lending at CIBC. "Prioritizing where to spend your home improvement dollars is smart, but before you begin, you should make sure that you have a clear plan in place and access to the funds that you need to get the job done."

Mr. Gollom also says that staying on top of home maintenance and repairs is a necessary part of homeownership that can safeguard your investment and help save money down the road. "Homeowners should budget for general upkeep. Putting money into fixing a leaky roof today is far cheaper than the cost of a new roof or dealing with expensive water damage in the future."

HGTV's Scott McGillivray on maximizing your return on your renovation investment

Many homeowners are choosing to renovate, instead of move, to get the home they want, says Scott McGillivray, a real estate investor and host of HGTV's Income Property.

"I find that more and more people right across Canada are looking for creative solutions to add more space so that they don't have to move," Mr. McGillivray says.

But homeowners should carefully consider the return on investment before they begin any renovation, he says. While it depends on your personal situation, Mr. McGillivray says your money may be better spent with certain renovations over others.

While swimming pools and skylights might add a "wow factor" to your home, they usually won't drive up the selling price the way a new kitchen or bathroom would, says Mr. McGillivray, warning that you shouldn't over-improve for the neighbourhood.

"You don't want to build a $150,000 custom kitchen in a $200,000 home. You have to be realistic about your needs, and where money is best spent."

Here are a few examples:

Getting the biggest bang for your renovation buck 

1. Bathrooms: Modernizing a bathroom - adding new fixtures, a low-flow toilet, space-saving cabinets, new tile or adding a master bedroom ensuite can all add value, often at a reasonable cost.
2. Kitchens: Upgrading cabinetry, countertops or appliances, or enlarging a small or poorly laid out kitchen can add a premium to a home's value.
3. Finished basements: A finished basement can add space in your home by one-third.
4. Flooring: Ripping out old carpets or refinishing a hardwood floor can be a selling point.

CIBC Home Advice online

To help make home ownership easier and more manageable for clients, CIBC offers home ownership tips and advice from Mr. McGillivray at the CIBC Home Advice Centre. CIBC also recently launched a series of YouTube videos in which Mr. McGillivray provides short snippets of advice on budgeting, finding the right home and how to preserve and grow the value of your home.

Smart Budgeting - CIBC Home Advice: Episode 1
On The Hunt - CIBC Home Advice: Episode 2
Add Some Value - CIBC Home Advice: Episode 3
Renos 101 - CIBC Home Advice: Episode 4
Do You DIY? - CIBC Home Advice: Episode 5

KEY POLL FINDINGS

Percentage of Canadians who say they plan to invest in renovations in their home in the next 12 months:

Average dollar amount that Canadian homeowners say they are planning to spend on renovations in the next year:

Amount Canadian homeowners plan to spend on renovations by dollar range:

Top planned home renovations among Canadian homeowners planning to renovate (respondents could choose more than one option if applicable):

Each week, Nielsen Consumer Insights interviews just over 1000 Canadians through teleVox, the company's national telephone omnibus survey. These data were gathered in a sample of 1,020 Canadians between March 5-8, 2015. A sample of this size has a margin of error of +/-3.1%, 19 times out of 20. Some sample sizes for regional and age groups under Key Findings are smaller than typically reported and provided only as reference data.

About CIBC

CIBC is a leading Canadian-based global financial institution with 11 million personal banking and business clients. Through our three major business units - Retail and Business Banking, Wealth Management and Wholesale Banking - CIBC offers a full range of products and services through its comprehensive electronic banking network, branches and offices across Canada with offices in the United States and around the world. You can find other news releases and information about CIBC on our corporate website at www.cibc.com/ca/media-centre/.

SOURCE CIBC