A recent survey revealed over half of Canadians would choose to renovate their current home instead of moving to a new home, if they had a budget of $50,000.
With the current high-interest-rate environment and introduction of stricter mortgage regulations, there has been great focus in the media on potential Canadian homeowners struggling to break into the market.
These factors also impact current Canadian homeowners and their ability to relocate, however the survey found that the main reasons Canadian's would rather renovate their existing home than move are comfort and convenience - with a large number saying they simply like their current home and neighbourhood too much to move. Less than a third of respondents cited affordability as the deciding factor in their choice of "renovate" over "move".
Who would rather renovate than move?
The survey found a majority of Canadians in every age group would choose to renovate their home, but there was a clear difference among older Canadians. Forty-three percent of respondents aged between 18 and 25 says they would consider moving, with that number dropping to less than 20% among older Canadians aged over 65.
Additionally, those who live in suburban or rural areas were also more likely to renovate than move if given a budget of $50,000 than their compatriots in the city. In contrast to their older counterparts, Canadian millennials are likely on the brink of starting their careers or families, with nothing tying them down to one space or area, which makes the decision to move easier. It is telling then, that a majority of Canadians in the age bracket would still prefer to stay where they are and renovate.
Why renovate versus move?
Both processes can be time-consuming yet rewarding, so why choose one over the other? Out of those surveyed, 78% said they like their current home and neighbourhood, with 59% saying that was their main reason for choosing renovate over move. Four-in-ten said renovating will increase the value of their home, while 32% think the moving process is too much of a hassle.
Is renovating cheaper than moving?
Over a quarter of those (28%) who chose to renovate said they would go that route because they don’t think they can find a house right now within their budget. Indeed, it may be cheaper to renovate rather than apply for a mortgage and move, but that all depends on the type of renovation (basement remodelling, wing addition, landscaping, etc.).
Moving would require you to consider the possibility of interest rates changing. Though, as of recent, rate increases seem to have come to a pause. The Bank of Canada has already increased the key interest rate from 0.5% to 1.75% over the past year and a half. And though economists were predicting more hikes in 2019, the last BoC announcement made in early March hinted at leaving rates unchanged for a while due to a sharp decrease in GDP in the fourth quarter of 2018 and slower global growth.
Those who favour renovating over moving may also want to look into taking out a personal loan to increase affordability. A personal loan can be easier to apply for in comparison to other types of financing such as credit cards, or a personal line of credit from your bank. There are no restrictions in how you spend a personal loan, giving you the freedom to renovate as you please.