Home renovations holding up well

THINK OUTSIDE THE BOX:  The most recent numbers for Alberta suggest spending on residential renovations are near an all-time high.

As The Owl reported yesterday, the slow economy may be wearing on new housing starts in Alberta. But it doesn’t seem to be tempering the enthusiasm for renovating existing homes. In fact, the most recent numbers suggest spending on residential renovations are near an all-time high.

In the second quarter of this year, home owners spent $1.56 billion on expansions or improvements to their properties. The data include renovations on primary residence as well as cottages or recreational properties. And because the survey captures only major renovations (i.e., those which must be done with a municipal building permit) it probably underestimates the total value of renovations—minor, unreported renovations such as new flooring, paint or lighting are not captured.

Renovation spending in the second quarter would, in fact, be a new record high if it was not for the spending that was registered in late 2013 and early 2014. The renovation spending during these quarters were elevated by the southern Alberta flood in June of 2013 when millions of dollars were spent restoring houses that were devastated by the rising water.

The recent enthusiasm for renovation is a good sign that many Albertans are still investing money in their homes. They may not be snapping up new properties to the same extent as they were a few years ago. But they’re still finding the cash to put into their existing properties, creating homes and cottages that are larger, more modern and perhaps more energy efficient.

Todd Hirsch Chief Economist      The Owl – ATB Financial

 

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