Continued low borrowing costs and a growing housing stock will boost spending on renovations in Alberta this year and next year, says a report by the Altus Group.
The report said renovation spending, which is defined as the sum of residential alterations, conversions and repairs, reached $7.6 billion in the province in 2014, up 3.7 per cent from 2013. That was the second highest growth rate in the country behind Ontario’s 4.1 per cent.
The Altus Group is forecasting spending to increase by 2.6 per cent this year and by 3.8 per cent next year in the province.
In Canada, renovation spending reached an estimated $67.8 billion last year, up 3.2 per cent from 2013.
The report said the renovation sector accounted for 3.4 per cent of Canada’s gross domestic product in 2014 and renovations are the top purpose for Canadians borrowing with home equity lines of credit.
Alterations/improvements is the biggest component of renovations, contributing about three out of every four dollars spent.
The report said that beginning in the 2000s, spending on renovations grew at 8.7 per cent on an average annual rate. But for the last seven years, including the recession and the subsequent recovery, it has been 2.6 per cent as an average annual rate of growth.
Altus Group said this is still “impressive” when it is compared to the overall Canadian economic average annual growth rate of 1.6 per cent during the same period.