Renovation boom underway, CMHC says, as empty nesters need more space for adult chicks
People in Ontario spent $25B renovating their homes last year, Crown corporation says
Aging Canadian homeowners are increasingly deciding to stay where they are and renovate instead, especially since more adult children are still living under their roof.
That was one of the conclusions of a CMHC report on Ontario's housing market Tuesday, which looked at the booming market for home renovations.
Ontarians spent an estimated $25 billion on renovations last year, a figure that the housing agency says is forecast to keep increasing in the coming years. That's because the housing market itself is booming, and most buyers typically undergo some sort of renovation job within the first 12 months after they buy, indicate numbers by the Canada Mortgage and Housing Corporation.
Even more choose to improve their homes later, once the high costs of buying a new home are considered.
According to the latest Statistics Canada data, some of the more popular reno jobs include:
- Basement upgrades.
- Painting and wallpapering.
- Heating and air conditioning.
On the whole, Ontario's housing stock is aging. Roughly 57 per cent of all the homes in the province have been constructed since 1980, and those almost 40-year-old homes are in need of a few licks of paint — or more.
The trend is even more the case in rental units, where landowners can get around limits on rent hikes by spending money to improve their units' quality. "Existing homeowners and landlords looking to sell or rent existing space have undertaken more renovation work," the CMHC says.
But even aging homeowners who aren't renting out their homes to strangers are getting in on the trend.
Census data suggests roughly 80 per cent of homeowners over 55 years old don't want to move, and prefer to age in place in their existing homes. That's because "households only move if health and finances necessitate this or to be closer to family and friends," the CMHC says, adding that high real estate transaction fees are also a disincentive to moving.
So is having to make space for grown children at home. A recent Statistics Canada report found young people between 18 and 35 are more likely to be still living at home than they are to be in any other living arrangement — the first time in history that has been the case.
It's hard to downsize out of the family home if the nest isn't quite empty yet, the CMHC says.
"With a large share of young adults staying home longer due to economic and academic considerations, the need for space will remain important."
Within the province, the CMHC report says it expects southwestern Ontario to see even higher reno work in the coming years, due to a "combination of relatively higher than average employment, higher housing affordability levels, higher than average median age and continued pent-up demand based."
The Greater Toronto Area, however, is on track for a slowdown in renovations as an expected slowdown in the resale market "could dampen home price increases and in turn the incentive and confidence to invest in upgrades," CMHC says.