Canadians spending twice as much on home renovations
CanWest News Service; Edmonton Journal
Published: Tuesday, August 15, 2006
Home renovation spending in Canada has climbed steadily to a projected $42 billion in 2006 from $21 billion in 1999, says the latest Housing Market Outlook from Canada Mortgage and Housing Corp.
``Record levels of existing home sales in recent years, the effects of a strong job market and robust housing starts will continue to support growth in renovation spending in 2006,'' the federal government agency reported Monday.
Across Canada, such acceleration ``is expected to moderate in 2007 due to slower job growth and a decrease in new home construction and resale activity,'' it notes.
But Albertans will not lay down their tools: ``In Alberta, record resale transactions in 2006 will be credited for a 24 per cent jump in renovation spending in 2007 after posting a 14 per cent gain this year.''
Buyers of resale homes typically follow their purchase with further spending on renos.
Across Canada, 227,900 housing starts are expected in 2006. That's up only 1.1 per cent from 2005 but is a strong year by historical standards and may not be sustainable beyond 2007.
"Much of the pent-up demand that built up during the 1990s has now been fulfilled and residential construction activity will gradually move in line with demographic fundamentals,'' the report predicts.
Rising mortgage interest rates also will reduce demand from first-time buyers, "particularly as the gap between the cost of home ownership and renting widens.''
Home resales rose slightly in the first half of 2006 but, for most of Canada, that won't continue.
"A rise in the number of new listings coming onto the market will give potential home buyers more choice,'' according to the report.
"Sales are forecast to decline in all regions except in the prairies.''
Edmonton Journal
© CanWest News Service 2006
The Schacter Team - Langley Real Estate.