Average spend declines to a 6-year low of $10,211; only 1/3 plan to prepare a detailed budget despite risk of overspending
TORONTO, June 4, 2019 /CNW/ - CIBC poll (CM:TSX) (CM:NYSE) – While nearly half (49 per cent) of Canadians plan to renovate their home this year, spending on renovations continued to decline in 2019, falling to about $10,000 -- its lowest in six years—finds the annual CIBC Home Renovations Poll.
"Home renovation season is upon us again and while Canadians are moderating their spending, the majority tell us they are not preparing a budget, despite the risk of overspending," said Kathleen Woodard, Senior Vice President, Personal and Small Business Banking at CIBC. "Even as homeowners are moderating their spending and focusing more on necessary repairs, it's still important to plan for your renovation and how you'll pay for it."
Among those planning to renovate in the next 12 months:
- The average they plan to spend is $10,211, down from $10,959 in 2018
- Only one-third (32 per cent) have a detailed budget, down from 37 per cent in 2018
- Amongst those who completed recent renovations, 39 per cent went over budget
- 58 per cent plan on funding their renovations primarily with cash and savings, while 34 per cent plan to borrow the costs of the renovations
- 89 per cent of Canadians consider home renovations to be an investment
"Getting your budget down on paper and actively tracking your spending - including your plan to pay down any debt and address unexpected costs - will help ensure your home renovations go as smoothly as possible, so you can enjoy your updated space knowing that you've kept your broader finances on track," said Woodard.
Millennials are budgeting the most, but also overspending the most
The poll findings also show that millennials are most likely to put a budget in place (38 per cent) – but they're also most likely to break it. Amongst those who had undergone recent renovations, it was millennials who went over budget most often (50 per cent said they'd exceeded their budget on their last renovation).
On average, both millennials and Gen X planning to renovate will spend more on home renovations and improvements ($11,000) than boomers will ($8,582), with basic home maintenance and landscaping at the top of their to-do list.
For more information, homeowners can check out the CIBC's Home Renovation Checklist for valuable tips and advice to keep their project on track.
Additional quick tips:
- Be clear about what will (and won't) be part of your renovation
- Spend the time to research all your costs upfront and shop around for better prices
- Know the difference between what you're willing to spend, vs. what you're able to spend
- Speak to a financial advisor about how to best finance your renovation and consider any tax incentives available
- If borrowing, opt for a low-cost borrowing option like a secured line of credit, and make a plan to pay it off quickly by automating your payments
Other key findings:
- 67% of homeowners prefer to renovate their home than sell it and move elsewhere
- 57% of Canadians are willing to do the renovations themselves
- The top 3 renovations they plan to spend money on:
- Basic home maintenance 50% (52% in 2018); Landscaping 42% (39% in 2018); and Bathroom renovations 36% (39% in 2018)
CIBC Home Renovation Poll Disclaimer: From May 8th to May 9th 2019 an online survey of 1,515 randomly selected Canadian adults (of whom 470 are planning to do renovations in the next 12 months) who are Maru Voice Canada panelists was executed by Maru/Blue. For comparison purposes, a probability sample of this size has an estimated margin of error (which measures sampling variability) of +/- 2.5% (+/- 4.5% amongst those planning to do renovations in the next 12 months), 19 times out of 20. The results have been weighted by education, age, gender and region (and in Quebec, language) to match the population, according to Census data. This is to ensure the sample is representative of the entire adult population of Canada. Discrepancies in or between totals are due to rounding.
CIBC is a leading Canadian-based global financial institution with 11 million personal banking, business, public sector and institutional clients. Across Personal and Small Business Banking, Commercial Banking and Wealth Management, and Capital Markets businesses, CIBC offers a full range of advice, solutions and services through its leading digital banking network, and locations across Canada, in the United States and around the world. Ongoing news releases and more information about CIBC can be found at www.cibc.com/en/about-cibc/media-centre.html or by following on LinkedIn (www.linkedin.com/company/cibc), Twitter @CIBC, Facebook (www.facebook.com/CIBC) and Instagram @CIBCNow.