Almost 40% of recent renovation projects ran over budget
By Jennifer Hughes
Summer is here and a lot of Canadians are in the midst of a home-renovation project. In fact, in a CIBC survey, nearly half of Canadians (49%) said that they are renovating this year, an increase over last year’s 45%. However, more people say they’re cutting down on costs—a bit: the average they plan to spend went down to $10,211 from $10,959 in 2018.
Most Canadians are spending money on moderate renovations; 50% are carrying out basic maintenance, while the rest are spending on landscaping (42%) and bathroom renovations (36%).
Renovating isn’t cheap, and despite the slight reduction in average spending, some Canadians are still overspending. The poll, which surveyed over 1,500 randomly selected Canadians online, found that among those who had recently renovated, more than a third (39%) went over budget. In fact, only 32% had a detailed budget planned for their renovations. A detailed budget can help prevent overspending.
“Even as homeowners are moderating their spending and focusing more on necessary repairs, it’s still important to plan for your renovation and how you’ll pay for it,” said Kathleen Woodard, CIBC senior vice-president of Personal and Small Business Banking. Though over half of Canadians (58%) plan to use cash or savings to fund their renovations, one-third (34%) plan to borrow money to cover costs.
One of the most surprising discoveries of the survey is that millennials are more likely to create budgets (38%) than are other generations. However, they are also more likely to spend more money than they’d budgeted—50% of millennials went over budget.
The survey report advises researching costs upfront, understanding how much you’re able to spend, and speaking with a financial advisor to create a realistic budget for any renovation project.