Last year Canadians spent more money fixing up their homes than they spent on new ones.
Renos rule
Numbers compiled by the real estate consultancy Altus Group show $80.1 billion dollars was spent on home renovations in this country in 2019. This year was heading in the same direction until the pandemic set in and renovation spending fell off a cliff.
But things are recovering. 2020 is not expected to match 2019 but it seems that all these months of being cooped-up – and working from home – have Canadians moving ahead with home renovation plans.
Remote work catching on
A recent survey by payroll processor ADP suggests this could be an ongoing trend. The online poll of 1,538 working Canadians indicates 45% would prefer to work remotely at least three days a week. More than 25% of respondents expressed a preference for flexible hours of work.
Younger workers are even more enthusiastic about working remotely. Sixty-one percent of the 18 to 34 year-olds surveyed, expressed a preference for working out of the office at least three days a week. These younger workers are also the most confident that their workplace will change over the next five years, with 44% saying they believe their employer will offer more flexible conditions. Only 25% of workers over age 35 expect to see these changes.
There is evidence that workers may demand more remote or flex-hour options. The ADP survey suggests 15% of respondents have no desire to return to the office, with 12% expressing anxiety about going back. Within those two groups, 73% say they do not want to go back because they prefer to work remotely.
It’s not where you live, it's how you live
All of this would seem to open the door for on-going and increasing spending on home renovations. Spending that is fuelled by home equity lines of credit and other borrowing options.
“One of the main things I’m finding is people are less concerned about where they are living and are more concerned with how they are living,” says Melanna Giannakis. She is the branch manager of a credit union in the Niagara area of southern Ontario.
“People want more room and more space – home offices with nice backdrops for video conferencing, home gyms, finished basements, backyard pools… They want their own little hideaway where they can hunker down,” she adds.
Tele-commuting transports the market
Remote working, or telework, is also seen to be spurring changes in the broader real estate market. Many workers are no longer tied to downtown offices, making physical commuting a smaller consideration. That has triggered a boom in more remote, less densely populated areas.
Markets as remote as Yellowknife and Whitehorse, in the Northwest Territories and Yukon, are seeing the effects. Realtors had expected it would take a vaccine for COVID-19 to get the market back on track, but it rebounded quickly. In Yellowknife, 47 homes were posted for sale at the start of the third-quarter, nearly double the 24 that were on the market a year earlier. Those numbers are not big, but the rate of change is remarkable.
Commercial real estate can expect some big changes. Firms will be re-examining their leases and their need for office space as workers stay home.