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HGTV: Home and Garden Television

HGTV: Home and Garden Television

May 28, 2012 06:00 ET

BMO Home Renovation Report: Canadians Scale Back Plans for Spending in 2012

- Plans for home renovations down by 11 per cent nationally from 2011

- Kitchens top the home reno project list

- Painting provides returns of up to 300 per cent, while kitchen and bathroom remodelling projects provide up to 120 per cent

- Plans for renos in the Prairies and Atlantic Canada above national average

TORONTO, ONTARIO--(Marketwire - May 28, 2012) - According to the Annual BMO Home Renovation Report, fewer Canadians are planning home renovations this year but are choosing projects with the greatest returns - a sign that consumers are scaling back and becoming more strategic on spending amid rising concern about household debt.

Half of Canadian homeowners (51 per cent) plan to renovate their homes in the next year, compared with 62 per cent in 2011. Single family homeowners far out-pace their condo-dwelling counterparts (62 per cent versus 41 per cent respectively).

Regionally, the report revealed:

Plans for Home Renovations TOTAL BC AB MB/SK ON QC ATL
Yes 51 % 50 % 52 % 67 % 55 % 37 % 59 %
No 48 % 50 % 47 % 33 % 44 % 61 % 39 %

"The scaled-back plans for home renovations likely reflect increased caution on the part of households as they continue to reduce discretionary spending to rein in debt," said Sal Guatieri, Senior Economist, BMO Capital Markets. "After averaging 9 per cent in the past decade, consumer loan growth has slowed to almost 2 per cent recently, suggesting Canadians are taking recent debt warnings to heart."

The study, conducted by Leger Marketing, also revealed the top five renovation plans for Canadians:

  1. Kitchen - 39 per cent
  2. Bathroom - 35 per cent
  3. Basement - 16 per cent
  4. Bedroom - 11 per cent
  5. Family room - 10 per cent.

"Making home upgrades can add significant value to a home; however, it's crucial that homeowners consider the financial implications involved," Laura Parsons, Mortgage Expert, BMO Bank of Montreal. "Renovation projects come in different shapes and sizes and vary in return on investment. Homeowners planning to move forward with renovations should consult a professional to help balance wants versus needs and the overall value of the investment."

Ms. Parsons added that if the renovations are smaller in size and spaced out over a few months, a personal line of credit can give homeowners the flexibility to borrow what they need, when they need it. For larger projects, homeowners can consider a secured line of credit, such as BMO Homeowner ReadiLine®.

HGTV.ca and BMO offer the following advice on which renovation projects provide the best return on investment to help Canadians make sense of their reno plans:

1. Painting: When done well and with taste, applying a fresh coat of paint to the interior or exterior of a home is a simple way to realize gains on your renovation investment. Return: As much as 300 per cent.

2. Kitchen remodeling: A kitchen renovation can be one of the most costly home improvement projects, However, careful planning, budgeting and shopping will help minimize expenses. Consider aspects such as whether or not the project is in line with the style and quality of the rest of the house and neighbourhood. Return: 68-120 per cent.

3. Bathroom addition/remodeling: A bathroom addition should be a top priority for those looking to add value to a home with only one bathroom. This is particularly true if neighbouring homes feature multiple bathrooms. Additionally, upgrading an outdated bathroom will also bring significant value to a home. Return: 80-130 per cent; 65-120 per cent respectively.

4. Window/door replacement: Replacing inefficient windows or doors can be an excellent use of your home improvement dollars, as they refresh the esthetic and also help to keep energy costs down. Stick to standard styles; odd shapes and highly customized arrangements do little for resale value. Return: 50-90 per cent.

5. Deck addition/improvement/expansion: Decks are one of the few exterior improvements with any significant return, apart from painting. Return: 65-90 per cent.

Source: HGTV.ca Editorial Team. For more information, visit www.hgtv.ca.

The Leger Marketing survey was completed on-line from Thursday, March 19th, to Monday, March 22nd, 2011, using Leger Marketing's online panel, LegerWeb, with a sample of 1000 Canadian homeowners. A probability sample of the same size would yield a margin of error of ±3.1 per cent, 19 times out of 20.

About "Make It Happen Mondays"

BMO Bank of Montreal presents 'Make It Happen Mondays' on HGTV Canada every Monday night from 8pm-11pm ET/5pm-8pm PT.

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About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $525.5 billion as at April 30, 2012, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.

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