Almost half of Canadians plan to renovate their homes this year, but spending on renovations is expected to fall to its lowest level in six years, according to a CIBC poll.
The average spend on home renovations is expected to drop to $10,211, down slightly from last year. Only one-third of Canadians have a detailed budget for these renovations and of those who completed recent renovations, 39 per cent went over their budgets.
“Home renovation season is upon us again and while Canadians are moderating their spending, the majority tell us they are not preparing a budget, despite the risk of overspending,” says Kathleen Woodard, senior vice president, Personal and Small Business Banking at CIBC. “Even as homeowners are moderating their spending and focusing more on necessary repairs, it’s still important to plan for your renovations and how you’ll pay for it.”
Millennials most likely to overspend
The poll findings also show that millennials are most likely to put a budget in place (38 per cent) – but they're also most likely to break it. In fact, half of millennials said they had gone past their budget on their last renovation.
On average, both millennials and Gen Xers planning to renovate will spend more on home renovations and improvements ($11,000) than boomers ($8,582), with basic home maintenance and landscaping at the top of their to-do list.
CIBC suggests homeowners speak to a financial advisor about how to best finance their renovation plans and consider any tax incentives available.
If borrowing, it suggests homeowners opt for a low-cost borrowing option like a secured line of credit, and make a plan to pay it off quickly by automating their payments.