Over half of Canadian homeowners are planning renovations after a year of the pandemic, Scotiabank Poll reveals
After a year of the pandemic, Canadian homeowners are more likely to plan renovations than buy and sell their current property or purchase an investment home, despite an active housing market, a Scotiabank poll revealed. Six in ten Canadian homeowners are planning to renovate in the next 2 years, with backyards, kitchens and bathrooms topping the list.
For those looking to get into the housing market, the pandemic continues to play a strong role in their decision making. More than half of Canadians (57%) believe now is a good time to buy due to the low interest rate environment, up nearly 20% since August 2020. While younger Canadians (39%) say the pandemic has accelerated their plans to purchase a home, which has more than doubled in just over 6 months.
According to findings from the 2021 Scotiabank Housing Poll:
- Over a third of Canadians (36%) believe housing prices will come down over the next 12 months as a result of the pandemic, up from 25% in 2020.
- Canadians in the Atlantic provinces are least likely to put their home buying plans on hold as a result of the pandemic negatively impacting their finances (24%) compared to those in housing hotspots like BC, Quebec and Ontario.
- Among Canadian homeowners planning renovations, one in four are looking to start in the next six months.
- Almost half of millennials (48%) are considering moving out of the city to get more for their money, compared with 27% of those aged 35-54 and 15% of those aged 55+.
“The Canadian housing market has transformed over the past year, with record low interest rates, demand for housing outweighing supply, rising house prices and more Canadians making investments in their homes,” says John Webster, Head of Real Estate Secured Lending & Scotia Mortgage Authority at Scotiabank. “No matter where you are in the home buying or renovation journey, Scotiabank is here to help Canadians with competitive mortgage rates and flexible products that allow customers to tap into the money in their home.”
Finding the finances
Whether Canadians are buying a new home or renovating, personal savings is the number one way they plan to finance a down payment or home upgrades, signaling that Canadians have been able to put more into their savings over the past year. For existing homeowners or first-time buyers, a home equity line of credit can be a valuable resource when looking to make other investments.
Two in three Canadians polled said the ability to use the invested equity from their home for other financial needs was a deciding factor for them when choosing a mortgage. However, the study reveals that just over half of Canadians (53%) are not familiar enough with how a Home Equity Line of credit works in order to be able to explain it to a friend.
Canadians have many opportunities to leverage current interest rates in this environment and products such as our Scotia Total Equity® Plan (STEP), which allows you to use the equity in your home1 to increase your borrowing power and achieve your financial goals whether you’re looking to invest more in your property, buy a new home or plan for your future.
Scotiabank 2021 Housing Poll Highlights:
- Younger Canadians (18-34 years) are more likely to have accelerated their home buying plans in order to take advantage of lower interest rates (39%).
- Nearly two thirds (60%) of younger Canadians (18-34 years) are unfamiliar with a Home Equity Line and couldn’t explain it to a friend.
- Canadians aged 18-34 are significantly more likely to have bought their home within the past year (23%).
- Almost half of millennials polled (48%) are considering moving out of the city to get more for their money, compared with 27% of those ages 35-54 and 15% of those ages 55+.
Renovating or Moving on
- One-in-four Canadians who are currently renting (24%) plan to buy a home in the next 2 years.
- About half of Canadians (49%) planning to purchase an additional property will pay for the down payment with their savings.
- Regionally, plans for renovations are highest in the prairie provinces, with 70% in Manitoba/Saskatchewan, and 62% in Alberta.
- Top three renovation spaces for Canadians: backyards (33%), bathrooms (30%) and kitchens (28%).
The Great Migration
- Over a quarter (29%) of Canadians say they are considering moving or buying a home out of the city to get more for their money.
- More Canadians (30%) in housing hotspots like BC, Ontario and Quebec are considering moving or buying a home outside of the city, compared to only 19% of Canadians in the Atlantic region.
Top Housing Tips: Homebuyers, Investors and Renovators
- Talk to the experts
Whether you’re a first-time buyer, investing in a second property or embarking on renovations to your home, understanding what you can afford financially is the first step.
Seek advice from your financial or mortgage advisor, who can help you better understand what’s achievable for a down payment or to fund renovations. An advisor can look at your complete financial picture to see where there may be flexibility, available equity or government programs you might qualify for.
This video series breaks down each step of the homebuying journey, with helpful tips from Home Financing Advisors so you know what to expect every step of the way.
- Consider all your costs
It may seem like “the basics” but understanding the full extent of the costs before buying a new home or taking on a renovation can save you money in the long run.
Whether you’re buying your first home, moving, or buying an additional property, costs associated with making your purchase don’t stop at the down payment.
If you’re looking to renovate, get a quote from multiple contractors, understand the full cost of materials and look into local by-laws to see if there are any permits required to build that extension. Additional costs creep in when you’re not fully aware of the project’s scope.
- Expect the unexpected
Make sure you don’t max out your budget on your purchase or renovations and leave yourself vulnerable to surprise costs that may arise. Consider how you can create a safety net for yourself to protect you from unexpected expenses that may come up as a homeowner or when you’re renovating. When seeking out a mortgage, consider products that allow you to leverage the equity in your home, like the Scotia Total Equity® Plan (STEP), which can help you reach your financial goals faster and provide that safety net should you run into unexpected costs.
- Invest for the long term
Owning a home is a long-term investment. Play the long game and understand the value of your purchase, renovations or investment. Understanding the state of the housing market can help you realize the potential long-term gains of your new property or investing in your current one. Listen to Scotiabank’s Pandenomics Podcast to hear from Economics and Housing experts on how the market has changed in the last year and what we can expect from the year ahead.
The 2021 Scotiabank Housing Poll was conducted by Maru/Blue from March 17 to March 19, 2021. A total of 3,017 completed surveys were collected from a random sample of panel members across Canada.