During the months of July, August and September of 2014, the value of renovations to residential properties fell to just under $1.18 billion—the lowest level it’s been in nearly two years and a sharp drop from the $1.6 billion record in the spring. The data were released this morning from Statistics Canada as part of its regular quarterly report on residential investment activity.
Still, the big drop in the third quarter masks a longer term trend towards increased spending on renovations. Over the last ten years, investments on improvements to homes and condos have doubled. And even with the summer slump, total renovation spending over the last complete four quarters is up 19 per cent compared to the previous four quarters.
There could also be some substitution effect taking place in the residential market. That is, rather than renovating their existing home to get that new kitchen or bigger media room, some Albertans may have opted instead to purchase a new home. Construction on new residential properties set close to record highs over the summer. Instead of hiring contractors to rip out walls and flooring—or even trying to do it themselves—it seems some Albertans may have opted simply to move into something new.