Canada's $74BN renovation industry suddenly in limbo

Fears of COVID-19 require deft work on hands-on projects but planning and consultation continues

Western Investor
March 24, 2020

Home renovations Getty Images-1008799386
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Renovation spending in Western Canada was tracking upwards this year, forecast to touch the $74 billion range – $20 billion of that in the Western provinces – but a sharp slowdown due to the COVID-19 pandemic is now expected through at least the first half of this year.

Randy Kautzman, principal of Level One Construction in East Vancouver, has changed how his teams work since the virus began, but said renovations are still going on with the co-operation of home owners.

“We only use two-person teams now,” he said, “and for social distancing, the homeowner will be upstairs, for instance, as our guys are downstairs.” All his workers are masked while on site, he added.

The Altus Group 2019 Renovation Report, released March 19, found that, after a 5.1 per cent decline in 2018, Canada-wide spending on home repairs and improvements increased 2.1 per cent in 2019 compared with a year earlier.

Altus had also projected a three per cent increase in residential renovation spending in real terms this year, to around $54 billion, with another $20 billion spent on non-residential renovations. Reasons for the optimism had included an expectation of lower interest rates, a potential recovery in Alberta, which saw the biggest drop in renovation spending in both 2018 and 2019, and a federal government pledge of interest-free loans up to $40,000 to undertake energy-efficient retrofits in existing homes.

But that rosy outlook has retracted in the face of the coronavirus outbreak.

Ron Rapp, CEO of the Homebuilders Association of Vancouver (HAVAN), said he has heard of homeowners refusing to allow renovation contractors into their homes. “Some projects may have been postponed,” he said. “It’s a mixed bag.”

Kautzman added, “So far, none of our clients have cancelled projects.”

Social distancing is of particular concern in B.C., where Altus estimates that one in four renovations is in condominium apartments.

Calgary home renovations are also continuing carefully, said Lauren Herschel, spokeswoman for BILD Calgary, whose member share in Alberta’s $6 billion annual renovation industry.

“Our renovator members are proceeding really on an individual, case-by-case basis. They are focusing on completing jobs, where it is safe to do so, so that families can move back into their homes. Jobs that can be completed with little to no client interaction are also being done,” she said. She added that some renovators are able to take on new clients by doing remote consultation, estimates and planning.

“Everything is very day-by-day and we are all keeping a close eye on government regulations and public health orders as they come in,” Herschel said on March 24.

Copyright © Western Investor

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