HGTV Effect boosts home renovation spending

by Olivia D'Orazio03 Jul 2014
More homebuyers are willing to take on less-than-perfect properties, largely due to what a report by the Altus Group calls the ‘HGTV effect’.

“We find that more people, as they see home renovations programs, it really starts to get their gears going as to where they can go with their homes,” says Kimberly Robertson of Perfect Renovations Group. “We’ve definitely seen an upswing because of these programs.”

Total residential renovation spending increased to $63.4 billion in 2013, representing about 3.7 per cent of total gross domestic product and rising above the amount spent on new home construction.

Indeed, owners and sellers alike have been looking to renovation shows. One Toronto-area Realtor (who asked to remain anonymous) says he’s noticed more buyers searching for homes that require some TLC, while sellers work to complete renovations that they think will add value.

“A lot of sellers want to maximize the value they think they’ll get out of their property,” he said. “So they’ll consider putting the shine on the apple before they put it on the market – new doors, granite countertops.”

Those comfortably in their homes, meanwhile, are keen to upgrade to modern kitchens, luxurious bathrooms and inviting backyards.

“Willingness, at least in part, can be attributed to what is sometimes referred to as the ‘HGTV’ effect,” the report claims. “Many homeowners did not know how badly the really wanted new designer kitchens and bathrooms until then!”

HGTV Canada, a television station dedicated to home improvement programming, launched in 1997. Since then, renovations have increased year-on-year for the past 15 years.

Robertson, whose company has done work for HGTV as well as the Marilyn Dennis Show, says homeowners have also started to realize that upgrades can add value to the property – whether residential or rental.

“As people start to get into the renovations, they start to see that if they keep their homes up – even with small projects – it will increase the value,” she says. “Even rental properties with various upgrades will increase the rent that landlords can charge.”

Low mortgage rates, meanwhile, have helped to bolster the rise in renos, as many homeowners are in a better financial position to undertake such costly work.

Looking forward, Altus expects renovation spending to increase another 2.9 per cent in 2014, and another 3.2 per cent (to $67.3 billion) in 2015.
 

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