Renovation tax credit boosts home improvement projects in
Canada: RBC survey
Budget savvy renovators choose cash and savings over credit to pay for projects
TORONTO, October 21, 2009 — A majority (63
per cent) of Canadian renovators plan to take advantage of
the federal government's home renovation tax credit this year
and close to half (47 per cent) have done more renovations
because of the tax break, according to a new RBC study.
The survey, conducted by Ipsos Reid, also found that three
in four Canadians (76 per cent) who are planning to renovate
will pay for most or all of it with cash or savings, compared
with 70 per cent in 2008, signaling a shift in the way Canadians
view home improvement financing. Fewer renovators, 24 per
cent, plan to use a credit card to finance their renovation
this year, compared with 32 per cent in 2008.
"It's not surprising that Canadian renovators are getting
smarter with their renovation financing and avoiding debt
in light of the current economy," said Marcia Moffat,
RBC head, Home Equity Financing. "Whether they plan to
fix up and sell or renovate and stay, most are taking advantage
of tax credits and incentives. They're also planning to use
cash or lower interest credit to finance those renovations."
Although more homeowners say they have completed renovation
projects this year as a result of the tax credit, the RBC
Renovation Study found that fewer Canadian homeowners (66
per cent) intend to renovate over the next two years (compared
to 70 per cent in 2008). While intentions to renovate are
down, potential renovators anticipate spending more on their
renovations with the average amount moving up steadily to
$11,272 in 2009 from $8,834 back in 2005. Sixty-two per cent
are renovating to make their home more attractive, while 18
per cent are doing so to make their home easier to sell.
Many renovators (35 per cent) plan to focus on upgrades only
including exterior renovations (67 per cent), general renovations
such as painting and floors (64 per cent), bathrooms (41 per
cent) and kitchens (36 per cent).
As for the biggest renovation headache, most homeowners complained
of going over budget (30 per cent) and almost one third (32
per cent) said the time it took to complete the renovations
was worse than expected.
"Renovating is often fraught with frustration and it's
easy for costs to rise by adding small projects until you're
over budget and behind schedule," added Moffat. "The
best course of action is to expect the unexpected and prepare
with advance planning, a realistic budget and flexible financing
options at the outset."
|Renovations by the Numbers
|Intentions among Regions
|Renovate or Sell/Move
These are some of the findings of an RBC poll conducted by
Ipsos Reid between September 8 -16, 2009. The online survey
is based on a randomly selected representative sample of 3,120
adult Canadian homeowners of whom 2,050 plan to renovate within
the next two years. With a representative sample of this size,
the results are considered accurate to within ± 1.8
percentage points, 19 times out of 20, of what they would
have been had the entire adult Canadian population been polled.
The sample's composition reflects that of the actual Canadian
population according to Census data.
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Media Relations, 416-974-2124
Jacqui van der Jagt,
Corporate Communications, 416-974-1756
For full tabular results, please see the Ipsos Reid website