(Special) - It's spring and many homeowners across the country may be asking themselves if it's better to stay in their existing home and renovate it or move.
A recent survey by RateSupermarket.ca has found that Canadians are ready to renovate their homes this year. Half of Canadians said they would choose to renovate their current home instead of moving if they had a budget of $50,000 while 30 per cent said they would move instead.
The survey found that 40 per cent of Canadians believe renovating will increase the value of their homes, 32 per cent said that moving is too much of a hassle and 28 per cent stated they prefer to stay where they are because they don't think they could find a house right now that is within their budget.
Almost eight out of 10 Canadians (78 per cent) said they like their current home or neighbourhood, with almost 60 per cent saying this is their top reason for staying in their home.
Janine White, vice president of marketplace and strategy at RateSupermarket.ca, said the survey shows Canadians understand and appreciate the value of their real estate investment.
"With higher interest rates and stricter mortgage rules it is becoming harder for many Canadians to break into the housing market," White said in an interview. "There are a lot of hassles and expenses like preparing the house for sale, legal and real estate fees and moving costs, which you will probably never get back. Renovating can make a lot of financial sense."
The majority of Canadians in rural communities and the suburbs and in every major age category expressed a preference to renovate rather than move. Rural and suburban Canadians said they would prefer to stay in their homes and renovate. Only 35 per cent of urban Canadians said they would prefer to move.
While the majority of Canadians in all major age categories said they would prefer to renovate rather than move, there were some differences between older and younger age groups. Forty-three per cent of Canadians between 18 and 34 said they would move compared to only 15 per cent of Canadians over 65 would leave their current houses.
"The desire to stay put by older Canadians may stem from them being more established in their current homes," White said. "Those in their 20s and 30s are looking to acquire some equity and build their financial portfolio, which translates to their greater willingness to move."
A recent poll by CIBC found that while nearly half of Canadians planned to renovate their homes in 2018, spending was down about seven per cent to $11,000. Top renovation projects included basic maintenance, landscaping and bathrooms.
White says consumers coming to RateSupermarket.ca are looking to either increase their mortgage or take on a home equity line of credit (HELOC) to finance their renovations.
A HELOC allows you to borrow against the equity in your home at a lower interest rate than a traditional line of credit. Essentially, it's the amount of ownership of a property you have built up through both appreciation as well as reductions in the mortgage principal made through your mortgage payments. So, as you pay off your mortgage and build equity in your home, a HELOC gives you the ability to re-borrow a portion of these funds.
Other options can include dipping into cash savings, withdrawing money from a tax-free savings account or putting it on your credit card. Financial experts believe people should carefully consider the cost of the renovation as well as interest costs and weigh the benefits against other possible uses of the money such as paying down debt and/or saving for retirement.
If in doubt, talk to a trusted financial adviser who can help you understand how it may impact your personal financial situation.
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.
Copyright 2019 Talbot Boggs