Renovation spending was tracking up
March 26, 2020
Renovation spending in Canada was tracking upwards, according to Altus Group, but most contractors say a slowdown is expected in the first half of this year. The reason, of course, is the COVID-19 pandemic which is keeping many Canadian households in isolation.
The Altus 2019 Renovation Report found that, after a 5.1 per cent decline in 2018, spending on home repairs and improvements was forecast to increase 2.1 per cent in 2019 compared to a year earlier.
Altus had also projected a 3 per cent increase in residential renovation spending in real terms this year to around $56 billion with another $20 billion spent on non-residential construction. Reasons for the optimism included an expectation of lower interest rates, a potential recovery in Alberta which saw the biggest drop in renovation spending in both 2018 and 2019, and a federal government pledge of interest-free loans up to $40,000 to undertake energy efficient retrofits in existing homes.
While COVID-19 did cause interest rates to fall, it has also led to further economic declines in Alberta because of a dramatic plunge in oil prices and has virtually stopped large-scale home renovations. Contractors contacted by Home BUILDER in B.C., Manitoba and Ontario all reported planned projects being postponed or cancelled.
It appears that renovation contractors may see a large increase in renovation spending once the pandemic dangers subside, but it could take months for a full recovery to be underway.