The renovation industry saw quite the boom in the first two years of the pandemic as people spent more time in their homes, and that momentum has continued despite heftier costs and rising interest rates.

Dave Kenney, who runs BroLaws Construction with his brother-in-law, said a kitchen renovation might cost between $15,000 and $20,000 more than it did just a couple of years ago.

“A job two years ago and a job now aren’t comparable, which is a little hard as a business owner when you get callbacks for other jobs that people have used you for before,” he said.

Jordy Fagan, co-founder of Toronto-based interior design firm Collective Studio, said projects are more expensive over all right now, which she attributes largely to labour costs. She said prices for materials, such as lumber, have somewhat stabilized in comparison to big fluctuations over the past two years, but still remain higher than prepandemic levels.

Coming out of the first lockdown, Collective Studio saw demand skyrocket in the summer of 2020. “That summer felt a little bit more normal even though we were pre-vaccine. I feel like that ignited interest in getting ready for that next fall wave in terms of setting up work-from-home situations and understanding that kids weren’t necessarily going back to school come September,” Ms. Fagan said. “The volume started to get insanely large, which was amazing.”

Fast forward to 2022 and declining consumer confidence has affected some of that volume, but the demand is still very much there, Ms. Fagan said. “I think people have some money saved away now,” she said.

Meanwhile, BroLaws’s Mr. Kenney said one of the challenges over the past couple of years has been around quality labour, especially as demand remains hot and workers are stretched.

He said his company is working to foster interest in the trades and give young people the proper training and experience. “I think we need more advocates or people who can showcase that the trades can be a good place to work, and that you can be just as successful as any other job,” he said. Mr. Kenney added that he has raised his employees’ wages as the cost of living goes up, and has consequently increased prices in order to maintain that.

In September, average hourly wages for construction workers were up 7.5% year-over-year, a $2.36 increase to $33.79, according to Statistics Canada.

While Mr. Kenney has been able to keep up with the demand, he said getting projects to 100% is still an issue sometimes owing to delays.

Homeowners spent on average about $13,000 between March, 2021, and February, 2022, renovating the inside of their home, while an average of $6,600 was spent on outdoor projects, based on data from home improvement company HomeStars. HomeStars also found that homeowners expect to spend an average of more than $25,000 for home renovations from March, 2022, to February, 2023.

So, what have people been asking for this year? Dedicated spaces for kids to do work, home offices and spaces to entertain, Ms. Fagan said. Mr. Kenney said there are also a lot of requests for kitchen overhauls, outdoor projects and improvements to indoor air quality.

Looking ahead to 2023, some industry experts say there could be a bit of a cool down on the way. Kevin Lee, CEO of the Canadian Home Builders’ Association, has already noticed a slight slowing in demand in the second half of 2022. “A lot of people when they’re doing especially major renovations are financing it through things like their lines of credit. So as the cost of borrowing money goes up as quickly as it has, a lot of people are now putting off some of their renovations,” he said.

However, RenoAssistance, a general contractor business that is part of Desjardins, sees the renovation market remaining strong next year. That is because more homeowners are choosing to stay in their current property and improving it rather than trying to find a new property in a cooling housing market, it said.

Source: Globe and Mail
Source: Toronto Star