Predicted 9.8% increase in renovation spending to keep contractors busy
Wendy McLellan
Province
Renovator Brent Repin inspects plans for a house in Vancouver’s South Granville area. Photograph by : Jon Murray, The Province
New-home construction is expected to slow this year and next, but renovation jobs will keep contractors busy as people upgrade their current homes rather than move.
Two national reports on the residential construction industry released yesterday forecast a softening of demand for new housing this year and next, but they also expect renovations to continue driving growth in the sector.
The Conference Board of Canada says new-home building accounts for about half of the investment in residential construction with most of the rest spent on repairs and renovations.
The board’s Canadian Industrial Outlook: Canada‘s Residential Construction Industry — Summer 2007 report said renovations and repairs will become “the major pillar supporting the industry through the expected downturn in housing starts in 2007 and 2008.”
In its third-quarter housing market report, Canada Mortgage and Housing Corp. said new-home construction will decline in every province except Manitoba, Quebec and Saskatchewan as higher house prices and rising mortgage rates begin to affect buying decisions.
Nationally, CMHC predicts housing starts will slow the rest of this year and next, but still remain at the healthy level of more than 200,000 units. Renovation spending is predicted to increase by 9.8 per cent this year before easing to 6.8 per cent next year.
“We’ve been anticipating a modest decline in housing starts for some time,” said Keith Sashaw, president of the Vancouver Regional Construction Association. “It’s a moderation, and it’s to be expected. It’s a reasonable return to a good level of housing construction.”
Sashaw said renovation work has become a major part of residential construction activity and the trend is expected to continue.
“We have an aging housing stock that needs to be updated, and the high cost of land is driving people to stay where they are,” he said.
Peter Simpson, CEO of the Greater Vancouver Home Builders Association, said Lower Mainland residents spent $2.5 billion last year on renovations and that figure is expected to be higher this year.
“People are spending a lot of money on home renovations, but they are waiting longer to get the job done — contractors are facing the same labour shortages everyone else is suffering.”
Brent Repin, co-owner of BDR Artisan Construction Inc., said his Vancouver-based company is busy with renovation work as homeowners try to maximize their living space.
“The big push on the west side is expanding homes built on small city lots,” Repin said. “We’re adding rooms, clearing out basement suites to make more room for young families. People are really looking for more space, and they want open- concept floor plans.”
Bob Rasmus, president of RJR Construction Management, said he gets calls every day from people looking to renovate their homes.
“We have a huge number of projects — some probably won’t even start until January,” Rasmus said. “When someone calls and they want to start a renovation job in September, I just laugh. Everybody who’s good is busy.”
© The Vancouver Province 2007
