Housing Intentions Hold Steady

We keep hearing the tales of gloom and doom--investments plummeting, stock market rollercoaster rides, mortgage woes. The economy is in trouble. And no doubt, it proved a decisive issue in last month's Federal Election and will shape this week's U.S. Election. But when it comes home, how are Canadians reacting to it all?

According to a new Ipsos Reid poll conducted in October on behalf of RBC, despite the turbulence and the turmoil of the current economic crisis, housing purchasing intentions are holding steady. Twenty-two percent (22%) of Canadians say they are `likely' (7% very/15% somewhat) to purchase a home within the next two years, down only 1 point since January of this year.

Interestingly, an RBC-Ipsos poll of homeowners conducted in August found that home renovation intentions for the next two years are slightly up this year (70%) over last year (67%). Perhaps this is a result of the fact that now eight in ten (80%, up 6 points) homeowners believe that if their house needed major work, they'd rather renovate than sell (20%, down 6 points).

A majority of Canadians (55%) say they'd `definitely' continue to renovate their home, even if housing prices were to drop off. However, this proportion is down 11 points from 2007.

Not only are more Canadian homeowners planning to renovate over the next two years, they're also planning on spending more- about 10% more, at an average of $10,801, up from $9,850 last year.

Among the 63% of Canadian homeowners who have renovated over the past two years, 68% said they had a budget. Of those that did, 47% say they managed to stick to it. Even the 53% who went over budget managed to reign in their spending compared to past years, as budgets this year were only exceeded by 24% on average, much less than the 74% over budget revealed in last year's survey.

These past renovators have a wealth of knowledge to pass on to those who will be renovating going forward. Most common past renovation headaches and disasters include going over budget (26%), using the wrong contractor or tradesperson (14%), choosing the wrong products (12%), or doing the job themselves (11%).

Looking ahead, nearly one half (47%) of Canadians who intend to renovate in the next two years say they'll pay for all of it using cash or savings, down 4 points since last year. Among those who will finance at least a portion of their renovations, 33% will mainly use their line of credit, while 32% will use their credit cards. Just 19% plan to use a home-equity line of credit.

Furthermore, just 28% of homeowners say they would consider borrowing against the equity in their home to finance a renovation, down sharply from the 41% who said they would consider this type of financing last year.

These are the findings of an Ipsos Reid Home Renovation poll conducted on behalf of RBC from August 13 to August 18, 2008. This online survey of 3733 adult homeowners was conducted via the Ipsos I-Say Online Panel, Ipsos Reid's national online panel. A second survey of home-buying intentions with 1474 Canadian, was conducted from October 10 to 15. The results of these polls are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample's composition reflects that of the actual Canadian population according to Census data. Quota samples with weighting from the Ipsos online panel provide results that are intended to approximate a probability sample. Statistical margins of error are not applicable to online polls because they are based on samples drawn from opt-in online panels, not on random samples that mirror the population within a statistical probability ratio. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error. However, an unweighted probability sample of this size, with a 100% response rate, would have an estimated margin of error of +/- 1.6 percentage points, 19 times out of 20 had the entire adult population of homeowners in Canada been polled for the first poll, and +/- 2.6 percentage points for the second sample of Canadians as a whole.