Survey shows Canadians under 30 are putting off home improvements due to financial difficulties
A recent survey commissioned by FinanceIt Canada a point-of-sale financing service within the home improvement sector, indicated that current economic conditions are significantly affecting Canadians' intentions for home remodelling in the upcoming year.
According to the FinanceIt Consumer Lending Survey of Canadian homeowners, almost 40% of respondents – including nearly half (48%) of respondents aged 18 to 34 – cite affordability issues as the reason for delaying their renovation plans for anywhere between a year and indefinitely.
"It's no secret that Canadians are continuing to be mindful of spending as rising interest rates and financial uncertainty are felt across the country," Michael Garrity, CEO of Financeit, said.
"While some may have the option of shifting their renovation dates around, for those who are needing to make necessary upgrades, this can make for a challenging situation. It's not surprising that younger Canadians, who likely have less disposable income than their older counterparts, are being impacted at a greater rate."
With 43% of respondents declaring an interest in knowing more about the various choices, the Leger poll shows that Canadians are becoming increasingly open to and keen for alternative payment methods. Among those respondents aged 18 to 34, this percentage jumps to 57%.
FinanceIt merchants were also requested to submit an analysis of their current business activity since the onset of the country's economic challenges as part of the survey. Up to 90% of them said they expected business volume to fluctuate as customers become less willing to spend.
Even as Canadians want to hang on to cash for a rainy day, many are taking on home improvements out of necessity. “We've seen that increasing mortgage payments have resulted in households renovating their basements either to create a multi-generational home or to generate rental income,” said Medi Zadegan, president and CEO of White Orchid Build & Design.
In 2023, the home renovation industry is expected to be impacted by housing market activity in addition to growing financial reluctance and worry.
Some Canadians may not be able to participate in the property market due to higher borrowing rates that have come along with inflation. In these cases, upgrading the home rather than selling it may be a more appealing choice.
The survey also found just 23% of Canadians are aware of the financing options that are directly provided by home improvement contractors. Around a quarter would be willing to pay a slightly higher interest rate on a loan if it meant going through a simple application process.
Nearly a quarter of Canadians (23%) said that as long as the monthly payments are affordable, they are not particularly concerned about interest rates associated with financing their home improvement projects.