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Home remodeling mortgages - smaller and much more easily financed compared to larger mortgages utilized to finance new house construction for the purpose are already disparagingly dubbed 'McMansions' - will tend to be an expanding component of the Canadian mortgages market as the baby boom generation goes into retirement. Canadians might be increasingly purchasing home renovations and upgrades instead of building new, 'greenfield' homes - or so statistics for 2007 released from the Canadian Mortgage and Housing Corporation, Canada's federal mortgage insurer, appear to indicate. And this, before Canadian homeowners witnessed secondhand the implosion of the U.S. housing marketplace.

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In line with the CMHC's Renovation and Home Purchase Report released in May of 2008, homeowners in Canada's ten major urban centres spent over $19.7 billion on home renovations in 2007 - which is only in Canada's largest urban centres, not small cities, suburbs, villages and towns scattered coast to coast. In line with the CMHC's estimates, "1.5 million households in ten of Canada's major centres indicated they had completed some type of renovation in 2007." To break those numbers down further, that is representative of 37 percent of all homeowner households over these major centres, with 31% of such households undertaking renovations that cost in excess of $1,000 Cdn.



Statistics across Canada's five major regional centres - Vancouver, Calgary, Toronto, Montreal and Halifax - demonstrates the average amount spent on home renovations in 2007 was $13,200 Cdn, slightly over the $12,800 average for all ten major regional centres. That is not McMansion money, but neither is it chump change or a mere trifling amount.



Why is it that Canadians invest so heavily in home based renovations? "The primary reason given by households for renovating in 2007," in line with the CMHC, "was to update, add value or prepare to market - 59 %. (While) 27 per cent of respondents stated that the primary reason for renovating was that the home needed repairs."



Accordingly, the top 3 good reasons cited through the CMHC for renovations completed in 2007 were:



o Remodeling rooms - 31 %



o Painting or wallpapering - 27 %



o Hard surface flooring and wall-to-wall carpeting - 26 percent.



These numbers, while interesting, fall somewhat short of getting to the incentives that spurred almost 2 away from 5 Canadian homeowners (to the extent that statistics for Canada's major centers are fairly representative of homeowners across the country) to attempt major home repairs - repairs that averaged close to $13,00 Cdn. a pop.

A somewhat broader grouping of such home rehabilitation statistics, however, might be helpful for teasing out your incentives because of this degree of renovations spending.



Statistics Canada, the us government agency that assisted CMHC in compiling the numbers for that 2008 Renovation and residential Purchase Report, breaks home renovations on to two contrasting sub-groupings: alterations and improvements versus maintenance and repair. Maintenance and repairs, because the term suggests, contains any work undertaken "to have a property in good condition or maintain its appearance," while alterations and enhancements are work dome "to increase the enjoyment, value or useful life of the house."



Amongst those surveyed homeowners who did some form of renovations in 2007, according to the CMHC's numbers, "three quarters did some type of alteration and improvement with their home, while 42 percent did maintenance and repairs." (At first blush, the numbers don't enhance one hundred, but stats show that 18% of renovating households did maintenance and repair as well as alteration and improvement renovations.)



The predominance of homes undertaking home renovations to boost "the enjoyment, value or useful life" of their homes indicates the value of an investment these Canadians are making within their homes. Given that 2007 was a peak boom year in terms of increased home values, it isn't surprising that Canadians pushed a lot money-back into what for a lot of, if not most, is their biggest single investment. Search for continued growth in this area of spending as housing and areas settle into more sustainable amounts of growth than we have seen in the past decade.



With Canadian housing and real estate markets coming of their largest post-World War II boom, along with baby boomers increasingly feathering their nests (as they say) for retirement, we are able to probably expect the spread of McMansions to slow somewhat, while a growing number of Canadians take advantage of home rehabilitation mortgages to boost the enjoyment, value and usefulness of the property .