The Renovation and Home Purchase Survey reports on actual renovation expenditures made in the previous year, as well as intentions to buy or renovate a home in 2010 in the following 10 major centres: St. John’s, Halifax, Québec City, Montréal, Ottawa, Toronto, Winnipeg, Calgary, Edmonton, and Vancouver.1 The survey provides timely information on renovation market trends.

“More than $25.8 billion was spent on renovations in 2009 across the 10 major surveyed centres, an increase of about $4.5 billion compared to 2008,” said Gustavo Durango, Senior Economist at CMHC. “As well, when Canadian homeowners were asked about their renovation plans for this year, 43 per cent indicated that they intend to spend $1,000 or more by the end of 2010.”

Half of the households surveyed reported that the cost of renovations undertaken in 2009 was in line with what they had budgeted, while 35 per cent said that they went over their planned budget for the renovation. Twenty-seven per cent of households that undertook a renovation project hired a contractor for a portion of the work. Twenty five per cent of renovations in 2009 were completed by “do it yourselfers”. However, many households (42 per cent) chose to contract out the entire renovation project.

Across the surveyed centres, 76 per cent of households who undertook renovations in 2009 paid for the work from savings, a slight increase from 75 per cent in 2008.

Moishe Alexander – Renovation Spending

The main reason given by households for renovating in 2009 was to update, add value or to prepare to sell (52 per cent). Thirty-two per cent said the main reason for renovating was that their home needed repairs. The top three renovations completed last year were: remodelling rooms (34 per cent); painting or wallpapering (29 per cent); hard surface flooring and wall-to-wall carpeting (27 per cent).

Of the 10 major surveyed centres, the highest percentage of homeowner households that renovated in 2009 was in St. John’s at 59 per cent, followed by Ottawa at 58 per cent, and Halifax and Winnipeg (both at 55 per cent). The centre with the lowest proportion was Montréal at 45 per cent.

Renovation intentions for 2010, across the 10 surveyed centres, are highest in St. John’s, where 55 per cent of consumers indicated they plan to undertake renovations costing $1,000 or more. This is followed by Halifax, Winnipeg and Ottawa (all at 50 per cent). The proportion of potential renovators is lowest in Québec City and Montréal (both at 39 per cent).

On the home purchasing front, six per cent of all households indicated they bought a home in 2009, unchanged from 2008. The largest share of homebuyers was in Edmonton (nine per cent), followed by St. John’s, Quebec, Ottawa and Winnipeg (all at seven per cent). The lowest share of homebuyers was in Toronto (five per cent).

Five per cent of households across the surveyed centres intend to purchase a home that will be used as a primary residence in 2010.

Home buying intentions are strongest in Edmonton where seven per cent of households reported that they are considering buying a home this year, up from six per cent in 2009. Purchase intentions are the lowest in St. John’s and Ottawa at four per cent (these were the only jurisdictions reporting lower intentions than last year, a decline from five per cent in 2009).

A total of 28,669 homes traded hands via the Multiple Listing Service® (MLS®) nationally in February 2009 on a seasonally adjusted basis. This is 8.6 per cent above seasonally adjusted levels in January 2009, and the first monthly increase in activity since September 2008. Seasonally adjusted activity in February also surpassed levels reported in November and December of 2008.

Monthly seasonal increases in activity were largest in British Columbia (14.4 per cent), Nova Scotia (12.7 per cent), and Alberta (11.9 per cent). In Ontario and Quebec, the monthly rise was on par with the national increase.

“Typically the Spring market we’re moving into generates more activity, and this year there are the benefits from historically low mortgage rates and improved affordability in most markets,” says the President of The Canadian Real Estate Association, Calvin Lindberg. “REALTORS® are reporting increased interest especially from first time homebuyers.”

Actual (not seasonally adjusted) transactions numbered 25,373 units in February 2009. This was 31 per cent below MLS® residential sales levels a year earlier, but it is the smallest year-over-year decline since October 2008.

The supply of homes for sale remains high, but has been trending lower. National MLS® residential new listings numbered 65,060 units in February 2009, down 10.9 per cent from the same month one year ago. On a seasonally adjusted basis, MLS® residential new listings are down 11.4 per cent from their peak reached in May 2008.

“The housing supply is expected to continue easing, but it will take time before it realigns with lower demand,” said CREA Chief Economist Gregory Klump. “Economic uncertainty is keeping home buyers in a cautious mood, so homes are taking longer to sell than in recent years. Lower sales activity at the higher end of the price spectrum will keep the national MLS® residential average price under downward pressure.”

The national average price for home sales via the MLS® was $281,972 in February 2009, 9.2 per cent below February 2008. This is smaller than year-over-year declines observed in the past four months. It is also the first time that the year-over-year decline in the national average price has decelerated since first turning negative in July 2008.

The national MLS® residential average price continues to be pushed downward by lower activity in some of Canada’s more expensive housing markets and by fewer transactions in higher price ranges. The MLS® average home sale price remained up from year-ago levels in Saskatchewan, Manitoba, Quebec, New Brunswick, Prince Edward Island, and Newfoundland & Labrador in February 2009.

“Real estate is local, so it is important that buyers and sellers accurately determine pricing issues in their specific neighbourhood,” adds CREA President Calvin Lindberg, a West Vancouver REALTOR® .”Despite the doom and gloom, there are multiple offers on properties in some markets. That happens when the house is priced comparably to others in the area. Buyers are looking, but they are confused by the barrage of information they’re getting about the economy and the state of real estate. Consumer confidence remains a critical factor for the housing market.”

The downward pressure on the national MLS® residential average price is being skewed lower in large part by fewer sales in British Columbia, Alberta and Ontario, where homes are more expensive and demand has softened most. MLS® home sales in these three provinces accounted for 66 per cent of national activity in February 2009, down from 69 per cent in 2008.

The price trend is similar but less dramatic for the weighted national MLS® average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national MLS® average sale price was down 5.3 per cent year-over-year in February, compared to a 6.1 per cent decline in January.

Seasonally adjusted residential dollar volume for MLS® sales totaled $8 billion in February 2009, an increase of 7.2 per cent from the previous month.

“Consumer confidence will continue to be depressed by a barrage of negative economic news in the months ahead,” said Klump. “Heightened job insecurity will keep many potential homebuyers on the sidelines. Those who are confident about their job situation will benefit from improving affordability in a number of housing markets.”

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month. The Canadian Real Estate Association has previously released these separately.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 98,000 REALTORS® working through more than 100 real estate Boards and Associations. Further information can be found at www.crea.ca.

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