BMO Bank of Montreal
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BMO Bank of Montreal

May 31, 2011 05:00 ET

Renos on the Rise-Canadians to Spend Upwards of $46 Billion on Home Renovations in 2011

- BMO study shows almost two-thirds of homeowners plan on renovating in the next two years

- One-quarter motivated by friends'/neighbours' homes

- Canadian homeowners looking to renovations to improve lifestyle, increase value of home

TORONTO, ONTARIO--(Marketwire - May 31, 2011) - According to BMO Economics, homeowners across Canada are expected to spend upwards of $46 billion on home renovations in 2011 – up moderately from the $45.3 billion Canadians dedicated to home upgrades in 2010. The forecast arrives on the heels of a BMO study showing two-thirds (62 per cent) of Canadian homeowners say they are likely to renovate their home in the next two years.

The study, conducted by Leger Marketing, also showed that reno-happy Canadians appear to be taking some of their cues from across the street, with 25 per cent of Canadians citing the properties of friends and neighbours as the main influencer for home renovations.

"Making home upgrades can add significant value to a homeowner's investment, so the numbers are definitely encouraging," said Katie Archdekin, Head of Mortgage Products, BMO Bank of Montreal. "However, it's crucial that homeowners consider the financial implications involved and take a 'measure twice, cut once' approach to double-checking their project budget before getting started."

While neighbours' homes are the main influencer, television programs and other media, including magazines and newspapers are also factors (20 per cent and 16 per cent respectively). Furthermore, those planning upgrades are more likely to seek an improved lifestyle as a result of the renovations (90 per cent), followed by an increase in the value of their home (79 per cent).

Ms. Archdekin adds that if the renovations are smaller in size and spaced out over a few months, a personal line of credit allows 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®.

BMO offers the following advice for Canadians considering home renovations:

  • Understand how a renovation will impact the value of your home by researching which renovations create increased value and are popular selling features.
  • Think long term when making financial decisions – whether you are using savings or borrowing to renovate, take the time to meet with a financial expert to ensure your renovation meets your long term financial objectives.
  • Expect the unexpected – be financially prepared for the unexpected such as a leaky roof, broken pipe or other course corrections that may occur during the project.
  • Get renovation quotes in writing and understand what guarantees they provide – for example; if the cost of the plumbing in your renovation is more work than expected, will the quote go up?

The Leger Marketing survey was completed on-line from Thursday, March 10th, to Monday, March 21st, 2011, using Leger Marketing's online panel, LegerWeb, with a sample of 1508 Canadian homeowners, 25-45 years old. A probability sample of the same size would yield a margin of error of ±2.5 per cent, 19 times out of 20.

For more information and advice on home ownership, including tips on home renovations, please visit www.bmo.com/smarthomeowners.

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