REPEAT-BMO Home Renovation Report: Canadians Scale Back Plans for Spending in 2012

TORONTO, ONTARIO--(Marketwire -05/28/12)- According to the Annual BMO Home Renovation Report, fewer Canadians are planning home renovations this year but are choosing projects with the greatest returns - a sign that consumers are scaling back and becoming more strategic on spending amid rising concern about household debt.

Half of Canadian homeowners (51 per cent) plan to renovate their homes in the next year, compared with 62 per cent in 2011. Single family homeowners far out-pace their condo-dwelling counterparts (62 per cent versus 41 per cent respectively).

Regionally, the report revealed:

"The scaled-back plans for home renovations likely reflect increased caution on the part of households as they continue to reduce discretionary spending to rein in debt," said Sal Guatieri, Senior Economist, BMO Capital Markets. "After averaging 9 per cent in the past decade, consumer loan growth has slowed to almost 2 per cent recently, suggesting Canadians are taking recent debt warnings to heart."

The study, conducted by Leger Marketing, also revealed the top five renovation plans for Canadians:

"Making home upgrades can add significant value to a home; however, it's crucial that homeowners consider the financial implications involved," Laura Parsons, Mortgage Expert, BMO Bank of Montreal. "Renovation projects come in different shapes and sizes and vary in return on investment. Homeowners planning to move forward with renovations should consult a professional to help balance wants versus needs and the overall value of the investment."

Ms. Parsons added that if the renovations are smaller in size and spaced out over a few months, a personal line of credit can give homeowners the flexibility to borrow what they need, when they need it. For larger projects, homeowners can consider a secured line of credit, such as BMO Homeowner ReadiLine.

HGTV.ca and BMO offer the following advice on which renovation projects provide the best return on investment to help Canadians make sense of their reno plans:

1. Painting: When done well and with taste, applying a fresh coat of paint to the interior or exterior of a home is a simple way to realize gains on your renovation investment. Return: As much as 300 per cent.

2. Kitchen remodeling: A kitchen renovation can be one of the most costly home improvement projects, However, careful planning, budgeting and shopping will help minimize expenses. Consider aspects such as whether or not the project is in line with the style and quality of the rest of the house and neighbourhood. Return: 68-120 per cent.

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REPEAT-BMO Home Renovation Report: Canadians Scale Back Plans for Spending in 2012