Many Canadians are prioritizing home renovations this summer over meeting other financial goals, according to the findings of a new survey released June 6.
Because of their renovation plans, nearly one-quarter of respondents said they are not paying down debt as fast as they should be, one-quarter aren't saving enough for emergencies, and 21 per cent are not saving enough for retirement, says the Ipsos poll conducted on behalf of BDO Canada Limited.
If their home renos exceed their budget, most would choose to spend more rather than put the work on hold, the survey found. Forty-four per cent would dip into savings, while 15 per cent said they would take on more debt to cover extra costs.
Focus on debt reduction
"Ideally, you want to avoid carrying a large debt balance over several months," says Doug Jones, President of BDO Canada. "With interest charges adding up each month, you could be paying back much more than you originally spent. We would suggest that Canadians focus on saving for retirement and reducing their existing debt rather than taking on more debt for home renovations."
The survey found that across Canada, 57 per cent of homeowners said they're likely to renovate in the next year. The two provinces with the highest number of households considering renos this year were Quebec at 72 per cent and Ontario at 61 per cent. Meanwhile, only 40 per cent of homeowners in the Atlantic provinces are considering renovations.
$16,439 on average
On average, Canadian homeowners plan to spend $16,439 on their home renovations, the survey found. Quebecers will finance the largest portion of their renovation with debt (31 per cent) while those in Saskatchewan and Manitoba will use the least amount of debt (20 per cent of the renovation cost).
Forty two per cent of those surveyed who are planning renovations say they plan to set a budget, while nine per cent do not. At 19 per cent, Atlantic Canadians are most likely to say they haven't budgeted and won't do so and they're also the most likely to use a credit card to pay for their renovations (23% vs. the national average of 13%).