Canada’s home renovation projects have now increased to over one million dollars. This comes as no surprise for city residents and agents who have seen a significant rise in pricing of such projects in over seven years. With the soaring interest rates, investors are now scared of borrowing more.
According to the Bank of Montreal, the moderation that was seen back in 2015 to 2016 is now on a constant rise. Expenditure on renovations was rated at 10 percent within the final three months of 2017, which is a rise compared to the previous year. Such a high is sending home improvement back to the recession era when the government used to fix up projects using the special tax credit.
The Renovation share
If you equate the home improvement projects to the share of total money spent on Canadian real estate, you will see an upward trend, given that ownership rates have improved significantly. Also, new housing construction now makes an even bigger component from the expert’s point of view. Renovation spending by professional contractors now peaks at 49.5 percent of the residential investments from the 43.2 percent in 2014.
The trend is projected to continue, given the long-term trend that reflects limited development space in bigger cities and an aging population. According to Kavicic, a real estate developer and home improvement manager, if you are in search of a decent lot, then you should start thinking of renovating an old house.
In the past few months, the Bank of Canada announced that it was cutting its interest rate down to a quarter of a point to 0.75%, which further decreased the interest in the form of debt and along the lines of credit. Real estate is an important aspect of the economy, and if the Canadian government doesn’t enforce legislation to govern such an upsurge, then there is bound to be a problem within the real estate niche.