A recent RE/MAX Canada report has highlighted shifting consumer trends in Canadian real estate, driven primarily by challenging market conditions and Covid-19. The 2021 Renovation Investment Report found more than half of Canadians renovated their home for personal enjoyment, not the perceived return on investment (ROI) that was the driver behind many renovation decisions in the past. Tightening market conditions from coast to coast and the “lockdown effect” of Covid-19 were factors in the shift.

Renovation Trends in Canadian Real Estate

• Three in 10 Canadians (29 per cent) renovated for non-essential “lifestyle” reasons, such as recreation/entertainment projects.
• More than half of Canadians renovated their home in 2020 for personal enjoyment. Of them, 29 per cent renovated to enhance lifestyle and 29 per cent renovated for essential reasons, such as safety and maintenance.
• Only 16 per cent of Canadians said they renovated to increase the market value of their home in order to sell within in the next one to three years 

According to a Leger survey conducted on behalf of RE/MAX Canada in 2021, Canadians were increasingly looking for ways to improve their quality of life at home a year into Covid-19. “Lifestyle” had eclipsed financial gain as the top reason for renovating during the course of the pandemic. However, despite the trend of home renovations done for personal use and enjoyment, 59 per cent of Canadians said they always consider the return on investment that a renovation will have on their home’s overall market value. While there is a current renovation trend based on lifestyle aspirations, practicality is never far from the surface.“The notion of the home as an investment continues to be an important consideration for Canadian homeowners; however, they clearly value the home for what it is meant to be: a place to live and enjoy spending time,” says Elton Ash, Executive Vice President RE/MAX Canada. “The pandemic has influenced virtually every aspect of our lives, including what Canadians want and need in a home. The uncertainty also compelled many sellers to move to the sidelines or renovate their home to accommodate current quality-of-life needs, which has further tightened conditions across many Canadian real estate markets.”This lack of inventory remained a continuing factor across Canada through 2021 and is expected to continue in 2022. In its Canadian residential real estate outlook for 2021, RE/MAX identified seller’s market conditions in 82 per cent of regions, with a noted spike in demand for single-family dwellings putting additional pressure on already limited supply. In its 2022 Canadian housing market outlook, that number increased to 97 per cent of regions.“Canadian real estate has continued to perform above and beyond expectations, with an increased opportunity for sellers to see a strong return on their investment given current demand,” says Christopher Alexander, President of RE/MAX Canada. “Strong seller’s markets continue to dominate many regions across Canada, with homes selling in record time and at record prices. While the impact that specific renovations have on ROI will vary by regional conditions, the Canadian housing market has generally shown us that you can’t go wrong with anything that improves your home in any way.”More than half of survey respondents (55 per cent) stated that they have already done or would like to do a home renovation within the next year. Of this group, 35 per cent said they would opt for minor renovations, such as fresh paint.RE/MAX brokers across Canada were also surveyed, and identified fresh paint and landscaping as two upgrades that yield a high ROI, despite being low-budget and minor in nature. This is in alignment with and good news for the nearly half of Canadians (47 per cent) who said they would want to keep their home improvement budget below $10,000, even if the guaranteed ROI was at least 10 per cent. Three in 10 Canadians (31 per cent) would bump up their spending from $10,000 to just under $50,000, and only four per cent would consider spending more than $50,000.Sixty-five per cent of RE/MAX brokers surveyed also claim that kitchen upgrades, including cabinets, countertops and appliances, yield the highest ROI for sellers, with 87 per cent of brokers naming the kitchen renovation as the top home improvement resonating with buyers in the Canadian real estate market.