The Greater Toronto Area has seen unprecedented rises in prices of homes, condos, and property in the past years. Seemingly overnight, the average price of a home in the GTA has exceeded half a million dollars, according to Global News. As a result, homeowners are stuck in what been called a “housing gridlock” that has prevented moves and spurred a sudden growth in the interest in renovation. While the common family with a home may need more room, for many it’s almost impossible to relocate due to high home prices at the moment. While many economists have been predicting a downturn, in the past few years all we’ve seen is steady growth in home and property prices that show no sign of slowing.
Canadians Invest More in Renovations
In lieu of the events of the past few years, we’ve seen a steady increase in the rate that homeowners invest in home renovation. Recent 2017 polls suggested that 50% of Canadian homeowners intend to invest in home renovation instead of selling their home in the future, as opposed to 40% in 2016. Economists say that this is the safest bet, as foreign investors continue to inflate property prices. CIBC’s April Survey states that: “Canadians are putting off the purchase of a new home in hopes that prices will come down.” This shift has also characterized a return to renovation as an investment in lifestyle and comfort, as opposed to an investment in your property value. With more and more people holding on to their homes for fear of not finding a reasonably priced property in the future, renovation is now a means of making the most out of the current situation. Consequently, lack of investment in renovation of new properties is leading to unreasonably priced homes in need of much attention on the market. Homeowners looking to buy may face the necessity of renovation upon purchasing a new home, despite wanting to avoid it.
2017 – So Is it The Time to Renovate?
As more homeowners invest in renovation, we find many customers asking us: is now the best time to renovate my home? We believe that the answer is yes. Homeowners are taking advantage of the housing market and the subsequent boom in renovation spending by pouring resources into home additions, renovations, improvements and remodels designed to give them a boost in the competition, raise the value of their home and provide them with comfort until the situation looks safer. Kimberly Greene of Which Mortgage states: “In tight housing markets, homeowners or landlords looking to sell or rent their units are competing with new builds, and renovating those spaces can give owners a leg up on the competition.”
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Many homeowners today choose to invest in a home addition to expand their space, over looking for a home with more bedrooms. A home addition provides you with the necessary space to live more comfortably while preventing you from spending your resources and time on planning a move, and worrying about the market. Home renovations and upgrades such as bathroom reno, home additions, kitchen renovation and especially full home renovations are simply the safer bet, and offer the most return on your investment.
So, whether you are a homeowner in need of an upgrade, or an investor looking to get the most out of your property, until the property bubble bursts you are stuck with two options: sell for a moderate return on your investment, or renovate for a better return. Ultimately, the choice for homeowners comes down to how much of a risk they are willing to take to secure a better home- because for now, the market shows no signs of cooling.
Renovation spending expected to rise in 2016
Ontario homeowners set to renovate:
Housing prices prompt Canadian homeowners to renovate instead of buying a new home