Home Sweet Home: Renovate or Sell?

While south of the border, financial woes have made housing a sore spot for the U.S. economy, the situation is not necessarily reflected in Canada. In Canada's stable and enticing real estate market, Canadians are feeling their homes are a sure bet for investment and would rather make a better home than pull up stakes.

If their house needed major repairs and they were faced with the decision to either renovate or sell their home, the vast majority (83%) of homeowners in Canada who know what they would do in this situation would elect to renovate their home rather than sell (17%), according to the 19th annual RBC Housing poll conducted by Ipsos Reid. Two in ten (18%) are unsure of the decision they would take in this instance.

Most homeowners are planning some type of home improvement or renovation, either in the next year (39%) or two (22%). When asked what types of home improvements they were planning, four in ten (43%) are planning to spruce up the bathroom, while an equal proportion (43%) will renovate their kitchen. One in three (33%) intend to renovate the basement, with half (47%) focusing on other areas of the home.

Reasons for wanting to renovate vary, but two in three (66%) say it's because they want to make their home more attractive and make upgrades. Others say their motivation is to increase the value of their home (46%), for safety/maintenance repair reasons (39%), to increase energy efficiency (39%), to make their home easier to sell (23%), to make their home more eco friendly (16%), to create more space (10%), to generate rental income (3%) or some other reason (5%).

Nearly half (46%) of all renovators intend to do the work themselves, compared to fewer who intend to hire a contractor (42%), or enlist the help of their spouse/partner (25%), a family member (21%), friend (13%), or some other person (2%). The average amount of money these renovators expect to spend is roughly $6,750. Nearly one quarter (23%) will spend more than $10,000 on their renovations, while three quarters (77%) will spend $10,000 or less.

Thinking about how they'll finance their renovations, most (71%) will use cash or savings, but some will use a line of credit (15%), home-equity line of credit or add-on mortgage (13%), credit cards (10%), a line of credit secured by an asset other than a home (4%), a personal loan (4%), or some other source of financing (4%).

These are some of the findings of an Ipsos Reid poll conducted between January 24 and 30, 2012, on behalf of RBC. For this survey, a sample of 1,328 Canadian homeowners from Ipsos' Canadian online panel was interviewed online. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. A survey with an unweighted probability sample of this size and a 100% response rate would have an estimated margin of error of +/- 2.8 percentage points, 19 times out of 20, of what the results would have been had the entire population of adults who own a home in Canada been polled. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error and measurement error.