RBC survey finds homebuying intentions hold steady
Renovation intentions are also up slightly
TORONTO, October 29, 2008 — A new RBC study
conducted during the market turmoil in October finds overall
intentions to purchase a home in the next two years remain
steady at 22 per cent and have not changed since January 2008.
As well, renovation intentions are slightly higher than last
year - up four percentage points as
70 per cent of respondents are planning to renovate or make
home improvements in the next two years.
"Despite recent economic events, we've noted that Canadians
still believe a home is a good investment and many are continuing
with their home improvement plans," remarked Catherine
Adams, RBC Royal Bank's vice-president, Home Equity Financing
According to RBC's 5th Annual Renovation Survey, given the
choice, most Canadian homeowners would opt for hammers and
paint brushes, rather than packing tape and cardboard boxes.
Seventy five per cent of Canadian homeowners say that, if
their home needed major renovations, they would rather renovate,
than sell and move.
While the majority of Canadians (55 per cent) would definitely
continue to renovate even if housing prices were to drop,
they appear to be a little more hesitant than they were in
2007 (66 per cent). Many Canadians seem to be choosing to
renovate rather than relocate, noted Adams.
Renovation Budgets
Most Canadians planning renovations will spend less than $50,000
and indicate they plan to spend $10,801 on average - up about
10 per cent from $9,850 in 2007.
The RBC survey also showed that 63 per cent of homeowners
have renovated in the past two years and more are establishing
a realistic reno budget. Seven-in-ten had a budget and half
(53 per cent) stuck to it. Even those renovators that did
go over budget have pulled back significantly. The average
budget excess was 24 per cent in 2008 compared to 74 per cent
overage in 2007 and 88 per cent in 2006.
To finance their reno expenditures, Canadians will be less
likely to tap into cash or savings than they have in the past
(47 per cent in 2008, 51 per cent in 2007 and 69 per cent
in 2004). Only 28 per cent would consider using the equity
in their home, down from 41 per cent who said they would consider
it in 2007. More men (32 per cent) than women (24 per cent)
would consider borrowing against home equity for their renovation
- the lowest cost of all the borrowing options.
"When people are looking for a mortgage they're usually
very cost sensitive, and they seek advice about the best possible
rate and product combination. We don't always see those same
savvy cost comparisons for home renovations, even though many
involve sizable expenses," added Adams.
When it comes to top mistakes or renovation disasters, Canadians
who have completed a renovation in the past two years, blame
going over budget (26 per cent); using the wrong contractor
or tradespeople (14 per cent); choosing the wrong products
(12 per cent) and doing it myself (11 per cent).
Renovations by the Numbers
| Intentions among Regions |
|
Average Spend |
| BC |
69%
(down from 70%) |
$10,064 |
| Alberta |
74%
(up from 69%) |
$12,422 |
| Sask/Man |
71%
(down from 75%) |
$ 9,742 |
| Ontario |
71%
(up from 66%) |
$12,305 |
| Quebec |
67%
(up from 64%) |
$ 8, 463 |
| Atlantic Canada |
73%
(up from 67%) |
$10,042 |
Renovate or Sell/Move
|
| Region |
Renovate |
Sell |
| BC |
75% |
19% |
| Alberta |
71% |
23% |
| Sask/Man |
75% |
17% |
| Ontario |
75% |
19% |
| Quebec |
74% |
17% |
| Atlantic Canada |
78% |
15% |
By Age:
- 18 to 34 - 70 per cent would renovate instead of sell
(down from 75 per cent )
- 35 to 54 - 78 per cent would renovate, not sell (up from
75 per cent )
- 55 and above - 76 per cent would opt for renovations (up
from 58 per cent )
These are some of the findings of two RBC polls conducted
by Ipsos Reid. The online surveys are based on nationally
balanced samples and were weighted according to 2006 Census
Data.
The poll conducted between October 9 and 13 included 1,474
Canadians. A random, representative sample of this size would
yield results considered accurate to within ±2.6 percentage
points, 19 times out of 20, of what they would have been had
the entire adult Canadian population been polled.
The second poll conducted between August 13 and 18, 2008
dealing with renovation intentions included 3,733 Canadian
homeowners. A random, representative sample of this size,
would yield results considered accurate to within ±1.6
percentage points, 19 times out of 20, of what they would
have been had the entire adult Canadian population been polled.
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Media Contact:
Jackie Braden, Media Relations, 416-974-2124
For full tabular results, please see the Ipsos Reid website
at www.ipsos.ca.
Downloadable graphics also available at www.rbc.com/newsroom
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