Can renovations offset falling home values in Canada?

Originally written: December 2, 2022 by Julia Stratton 

Strategic renovations can help protect and, in some cases, increase your home’s value, even as a real estate market softens.

That’s especially relevant in 2026. According to a Royal LePage report, Canada’s housing market has slowed, with the national aggregate home price down about 2% year-over-year in the first quarter of 2026. In the country’s most expensive markets, the declines have been steeper, with prices falling roughly 4.7% in the Greater Toronto Area and 4.5% in Metro Vancouver.  

At the same time, economic uncertainty and higher borrowing costs have kept some buyers on hold. In this kind of environment, not all upgrades carry the same weight. 

The best home renovations for protecting property value are practical, visible upgrades that improve livability, curb appeal, and energy or weather resilience. Kitchen and bathroom updates, fresh paint, modern lighting, garage door replacements, and roof upgrades can be especially valuable. 

In Canada, many of these projects recover roughly 50–80% of their cost at resale, while curb appeal improvements can deliver even higher returns, according to financial content platform Bremo. Homeowners should also notify their insurance provider before renovating, since upgrades may change the home’s replacement cost and insurance premium.

“Home renovations can add value to a home even in a shrinking market,” says Mike Heddle, broker and team lead of The Heddle Group at Royal LePage. “Typically, renovations will increase the value of a home. They can always be a great investment.”

The key, however, is choosing the right projects.

What are the best home renovations to increase property value?

Relying solely on market appreciation to build home equity can be risky. Instead, keeping your home modern, functional, and visually appealing is one of the most reliable ways to maintain or grow its value.

Buyers are often drawn to homes that feel updated and move-in ready. Small renovations in high-impact areas, like kitchens, bathrooms, and exterior features, can deliver strong returns without requiring major investments.

Some of the best value-adding home improvements include:

• Updating garage doors for improved curb appeal
• Repainting walls and cabinets in neutral, modern tones
• Replacing outdated light fixtures with contemporary designs
• Upgrading bathroom fixtures or installing a new vanity
• Removing heavy or outdated window treatments

While returns vary by market, here’s how much value some common renovations can add on average, according to Bremo:

• Kitchen renovation: ~60–80% Return on Investment (ROI) (e.g., $30,000 reno may add ~$18,000–24,000 in value) 
• Bathroom renovation: ~65–80% ROI (e.g., $20,000 reno may add ~$13,000–16,000) 
• Basement finishing: ~50–75% ROI (adds usable space and can increase value by tens of thousands depending on scope) 
• Windows and doors: ~55–75% ROI 
• Curb appeal upgrades: ~70–100%+ ROI due to low cost and strong visual impact 

These figures reflect average resale value gains—not guaranteed profit—and depend heavily on location, materials, and overall market conditions.

Read more: What is the cost of repairing a flooded basement?

How to budget for home renovations in any market

Before starting any renovation project, it’s important to evaluate your budget carefully. Costs can vary depending on materials, labour, and financing conditions, making it important to plan ahead.

“When people are thinking about making investments, with lumber on the rise, or borrowing costs ... that’s certainly something that should be taken into consideration when you’re looking at your household budget,” says Heddle.

To minimize financial risk, homeowners may want to focus on renovations that can be completed without taking on additional debt. Smaller, well-chosen projects can often deliver meaningful value without overextending your finances.

Do home renovations increase home insurance premiums?

Yes, home renovations can increase insurance premiums, but in some cases, they may also reduce them depending on the upgrade.

Because renovations typically increase the value of your home, they also have the potential to increase your home insurance premium.

Your home insurance provider wants as accurate a figure as possible of what it would cost to replace your home. If you recently redid your kitchen, that could raise your home’s replacement value and subsequently, your premium.

That said, the opposite can also be true. If you renovated your roof with a material that’s maybe more expensive but will significantly lower risk of weather damage, your insurer could actually lower your premium.

This is why it’s important to notify your insurance provider before starting any renovation project. Ensuring your coverage reflects your home’s updated value and confirming your contractor carries proper insurance can help prevent costly gaps.

Read next: Rebates for resiliency changes to your home reduce future insurance claims

When should you tell your insurance company about renovations?

You should inform your insurance provider before starting any major renovation project. Notifying your insurer ahead of time helps ensure:

• Your home remains properly insured during construction
• Liability risks related to contractors are addressed
• Your policy is updated to reflect the home’s new value after renovations are complete

Failing to update your insurer could leave you underinsured or exposed to unexpected costs if something goes wrong.

Are renovations worth it in a slow real estate market? 

Even when home prices soften, well-planned renovations can help offset potential losses and keep your property competitive.

“When you’re making an investment in your primary residence,” says Heddle, “we typically see those investments pay dividends in the long term.”

Ultimately, investing in your home with care and intention can pay off over time, both in enjoyment and resale value.

Frequently Asked Questions 

Do all renovations increase home value?
No. Some highly personalized or luxury upgrades may not deliver strong financial returns, especially if they don’t match buyer preferences.

What renovations offer the best return on investment?
Kitchen and bathroom updates, curb appeal improvements, and practical upgrades like roofing or windows tend to deliver the most consistent returns. 

Can renovations lower home insurance costs?
Yes. Upgrades that reduce risk—like new roofs, security systems, or flood prevention measures—can sometimes lead to lower premiums.